The ASX 200 slightly lower (-7) in mid-morning trade after another weak night. Materials ↑ on iron ore recovery, banks weaker on new APRA capital requirements, COL in AI alliance, NAB business confidence ahead #ausbiz


  • Economic data – NAB Business Confidence
  • Ex-dividend – Collins Foods (CKF) 10.5c, Metcash (MTS) 7.0c
  • Japanese data – Average Cash Earnings, Machine Tool Orders


  • Coles (COL) – From the AFR, COL has formed an alliance with Microsoft to use AI and digital systems to overhaul its supply chain, product range, customer engagement and workforce as it targets $1 billion in savings over four years.
  • Orica (ORA) – Nigel Garrard will retire from the position of Managing Director and Chief Executive Officer (effective 30 September, 2019) and be succeeded by Brian Lowe.
  • The Banks – APRA has announced that it will require domestic systemically important banks (D-SIBs) to increase their Total Capital by 3% of risk-weighted assets (RWA) by January 2024. The initial proposal contained in APRA’s discussion paper was 4% to 5% of RWA. For ANZ, with RWA of $396bn as at 31 March 2019, this represents an incremental increase in the Total Capital requirement of approximately $12bn, with an equivalent decrease in other senior funding. For NAB with an RWA of $403bn at 31 March 2019, the three percentage point requirement represents an incremental increase of $12.1bn of Total Capital. NAB expects to meet the new requirement primarily through the issuance of Tier 2 Capital, with a corresponding decrease in senior debt issuance. APRA continues to anticipate that D-SIBs would satisfy the requirement predominantly with Tier 2 capital.




US EQUITIES – S&P500 -14 (-0.48%), Dow Jones -116 (-0.43%), NASDAQ -63 (-0.78%)

Main themes

  • Lower rate cut expectations (traders back from holidays)
  • Apple (-2.1%) downgraded to Sell from Neutral (Rosenblatt).

EUROPEAN MARKETS – Mostly lower, but not by large amount. STOXX600 -0.05%, UK FTSE -0.05%, German DAX -0.20%, French CAC -0.08%, Deutsche bank (-5.4%) as restructuring gets underway. (Pulling out of global equities and trading and cutting 18,000 jobs)

Greek market -1.84% after New Democracy won outright majority during a weekend snap election in Greece. New Prime Minister Kyriakos Mitsotakis was sworn in today.


  • The USD is stronger at 97.40.
  • The Aussie dollar is lower at US69.75.

BONDS – 2-yr: +1 bp to 1.89%, 3-yr: +2 bps to 1.83%, 5-yr: UNCH at 1.84%, 10-yr: -1 bp to 2.03%, 30-yr: -3 bps to 2.52%


  • Oil – WTI futures rose US15c or 0.3% to US$57.66, with the key factors being rising US-Iran tensions and prospects of US-Chinese trade war on global demand.
  • Gold was down 0.1% to US$1,398.50, mostly a stronger US dollar issue
  • Iron Ore – Commsec has iron ore up US$3.50 or 3.1% to US$117.75 a tonne, recovering from the 6.2% fall the previous session on reports authorities were preparing to crackdown on soaring prices, with China’s top steelmakers forming a working group to investigate “irregularities”
  • LME metals – Mixed. Cu -0.25%, Ni +2.01%, Al +0.20%.


  • US economic data – May Consumer Credit $17.10bn (consensus $17.70bn; prior $17.50bn)
  • President Trump tweeted that the United States will “no longer deal with” the UK’s Ambassador to the US, Kim Darroch, after Mr Darroch criticised President Trump.
  • Hong Kong – Protests have continued, with demonstrators marching through a popular area for Mainland tourists.
  • Chinese data – June FX Reserves $3.12trln (expected $3.09 trln, prior $3.10 trln)
  • Japanese data – May Core Machinery Orders -7.8% (expected -3.6%; last 5.2%) to be 3.7%yoy (expected -3.9%; last 2.5%). May Current Account surplus JPY1.31 trln (expected surplus JPY1.24 trln; last surplus JPY1.60 trln). June Bank Lending +2.3%yoy (expected 2.6%; last 2.6%) and June Economy Watchers Current Index 44.0 (expected 43.9, last 44.1).
  • European data – June Sentix Investor Confidence -5.8 (expected 0.3, prior -3.3); German May trade surplus EUR18.70bn (expected surplus EUR16.80bn; last surplus EUR16.90bn). Imports -0.5% (expected 0.3%; last -0.9%) while exports +1.1% m/m (expected 0.5%; last -3.4%). May Industrial Production +0.3% (expected 0.4%; last -2.0%).
  • Iran has threatened to restart deactivated centrifuges and step up its enrichment of uranium to 20%, further threatening the 2015 nuclear agreement that Washington abandoned last year.
  • Turkey – Central Bank governor Murat Cetinkaya (who terms was due to expire in 202) was replaced by Murat Uysal after refusing repeated demands from the government to cut interest rates. The Lira fell to

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