MID MORNING MARKETS 14-06-19

The ASX 200 is down 7 points in mid-morning trade after a positive night marked by oil and iron ore ↑. Energy, Gold and Materials best, Banks and Financials worst. AMC notice from APRA and S&P index changes announced. Chinese data ahead. #ausbiz

m1m2m3TODAY

  • Ex-dividend – Ironbark Capital (IBC) 1.5c
  • Chinese data – Retail Sales, Industrial Production, Fixed Asset Investment (YTD)

m1

  • Japanese data – Industrial Production, Capacity Utilization, Balance of Trade

TONIGHT

  • US economic data – Retail Sales, Industrial Production, Capacity Utilization, Univ. of Michigan Consumer Sentiment – Prelim, Business Inventories

S&P – JUNE Q REBALANCE

Changes are effective 24 June 2019

S&P/ASX 20 Group

  • Addition – Goodman Group (GMG)
  • Removal – Coles Group Limited (COL)

S&P/ASX 100

  • Addition – Afterpay Touch Group Limited (APT), Beach Energy Limited (BPT)
  • Removal – Janus Henderson Group PLC (JHG), Adelaide Brighton Limited (ABC)

S&P/ASX 200

  • Addition – Clinuvel Pharmaceuticals Limited (CUV), Service Stream Limited (SSM), Austal Limited (ASB)
  • Removal – Seven West Media Limited (SWM), Syrah Resources Limited (SYR), Navitas Limited (NVT)

COMPANY NEWS

  • AMP – Notes APRA notice regarding the imposing of directions and additional conditions on the Registrable Superannuation Entity (RSE) licences of our superannuation trustees: AMP Superannuation Limited and NM Superannuation Proprietary Limited. AMP will fully implement the directions and additional conditions. We have been working constructively with APRA on this matter and have already taken action on a number of the issues raised. AMP says it has moved to expand the superannuation trustee boards, broadening the range of skills and experience, and has a new trustee operating model, as well as cutting fees for MySuper and MyNorth.
  • Fortescue Metals Group (FMG) – Farm-In and Joint Venture Agreement with Strategic Energy Resources (SER) to explore SER’s Myall Creek Copper-Gold project in South Australia. Fortescue will spend $1.5m on exploration over 5 years, including a minimum of 1500m of drilling at Myall Creek (EL6140 and EL5898) to earn an 80% interest in the project.
  • Saracen Minerals (SAR) – has made an off-market takeover offer to acquire Bligh Resources, with consideration comprising 0.0369 Saracen shares for every 1 Bligh share, valuing Bligh shares at 12.8c per share and the Company at $38.2m.
  • Atlas Arteria (ALX) – The French Government announced the selection of a consortium comprising Eiffage and APRR, as the preferred bidder on the Route CentreEurope Atlantique (RCEA) upgrade project in the Allier region. The RCEA project involves approximately 90 kilometres of road to be upgraded to motorway standards under a 48 year concession arrangement to 2067. RCEA is strategically located on a major east-west transit and trade route across France – a traffic flow currently not fully captured by APRR. The 90 kilometres route runs between Digoin in the east and Sazeret in the west.
  • Viva Energy Group (VEA) – Escrow period ends for senior management covering 6,344,637 ordinary shares on 30 June.

OVERNIGHT

m10m11

SPI FUTURES +12

US EQUITIES – S&P 500 +12 (+0.41%), Dow +102 (+0.39%), NASDAQ +44 (+0.57%).

Major themes

  • Attack on two tankers near Strait of Hormuz boosts crude oil and Treasuries. The US has blamed the attacks on Iran.

 

EUROPEAN MARKETS – All higher. STOXX600 +0.16%, UK FTSE +0.01%, German DAX +0.44%, French CAC +0.01%

CURRENCIES

  • The USD is little changed at 97.05.
  • The Aussie dollar is weaker at US69.16.

BONDS – 2-yr: -7 bps to 1.82%, 3-yr: -6 bps to 1.77%, 5-yr: -5 bps to 1.83%, 10-yr: -4 bps to 2.09%, 30-yr: -2 bps to 2.60%

COMMODITIES

  • Oil – WTI futures were up US$1.34 or 2.2% to US$52.22 after strikes against two tankers in the Gulf of Oman off the Coast of Iran. Prices were earlier up 4%
  • Iron Ore – IRESS has iron ore up US$1.50 at US$106.50 a tonne. CommSec has iron ore up US$3.70 or 3.5% at US$110.20 a tonne.
  • LME metals – Mixed. Cu +0.16%, Ni +0.00%, Al -0.03%

ECONOMIC DATA, NEWS & POLITICS

  • US economic data – Weekly Initial Claims 222,000 (consensus 220,000; prior 219,000), Continuing Claims 1.695m; prior 1.693m), May Export Prices -0.2% (prior 0.1%), May Import Prices -0.3% (prior 0.1%), May Export Prices ex-agriculture -0.2% (prior 0.2%), and May Import Prices ex-oil -0.3% (prior -0.1%)
  • US-China trade – A White House spokesman indicated that a meeting between President Trump and China’s President Xi is likely to happen at the G-20 summit in two weeks.
  • Chinese growth – Vice Premier Liu He said that more efforts should be made to support the economy and provide ample liquidity to the financial system.
  • UK politics – Boris Johnson won the first round of the contest to lead the British Conservative party. The second round of voting will take place on Tuesday.
  • European data – Industrial Production -0.5% (as expected, last -0.4%) to be -0.4%yoy (expected -0.5%; last -0.7%).

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