The ASX 200 is down 46 points in mid-morning trade despite +ve leads. Gold OK but rest terrible. IT, Telcos worst. AMP life sale dead, EDL acq and raising, US bank earnings in focus (margin pressure anyone?) Citigroup tonight.  #ausbiz


  • Chinese data – House Price Index, GDP Growth Rate, Retail Sales, Industrial Production, Fixed Asset Investment (YTD)


  • US economic data – Empire State Manufacturing
  • US earnings – Citigroup (c)


  • AMP – The sale of AMP Life to Resolution Life is highly unlikely to proceed on the current terms due to the challenges in meeting the condition precedent for Reserve Bank of New Zealand (RBNZ) approval. This condition requires RBNZ approval of a change of control for AMP Life in a form consistent with the current branch structure. Significant influence on any future price negotiation because of best estimate assumption changes since 30 June 2018 (reduction of approximately A$400m) and the impact of Protecting Your Super legislation (reduction of approximately A$300m). No interim dividend for 1H 19.
  • Elders (ELD) – Trading halt. Acquisition of Australian Independent Rural Retailers (AIRR) for $10.85 a share. 50% cash, 50% scrip. Strategic rationale – provides entry to the wholesale rural services market which enables a new growth channel; Potential to deliver net synergies $6.6 – 9.33m pa, to be gradually realised over the next two years; price is 27% premium to AIRR’s 60 day VWAP4 of $8.51; Expected to deliver low single digit EPS accretion on FY19 and low double digit EPS accretion post synergies; $1378m equity raising and issue of $79m of new Elders shares to AIRR shareholders as scrip consideration; ELD anticipates pro forma average FY19 net debt / EBITDA9 < 2.0x and is targeting average net debt / EBITDA
  • OZMineral (OZL) – Has entered into a $10 M three stage exploration program over 5 years with Investifator Resources Limited, whereby OZ Minerals Limited may earn up to 70% of Maslins Iron Oxide Copper-Gold (“IOCG”) Project.




  • Domestic data – RBA meeting minutes, Westpac leading index, employment data (exp 29K, 5.1% unemployment)
  • China – GDP, retail sales and industrial production
  • Japanese trade data and inflation
  • Europe – inflation
  • US economic data – retail sales, industrial production, housing starts, building permits, and leading indicators



  • Monday – Citigroup (c)
  • Tuesday – Domino’s Pizza (DPZ), Goldman Sachs (GS), JPMorgan Chase (JPM), Wells Fargo (WFC). After market – CSX, United Airlines (UAL),
  • Wednesday – Bank of America (BAC), Kraft Heinz (KHC). After market – Alcoa (AA), eBay (EBA), IBM (IBM), Netflix (NFLX),
  • Thursday – Blackstone (BX), Morgan Stanley (MS). After market – Microsoft (MFST)
  • Friday – American Express (AXP), BlackRock (BLK), Manpower (MAN)



  • Quarterly production reports – Rio Tinto (RIO), BHP Group (BHP), South 32 (S32), Woodside Petroleum (WPL), Santos (STO), traffic figures from Sydney Airport (SYD)
  • Earnings – Galaxy Resources (GXY), CIMIC Group (CIM)




US EQUITIES – S&P500 +14 (+0.46%), Dow Jones +244 (+0.90%), NASDAQ +48 (+0.59%)

Main themes

  • Rate cut expectations continue to support markets despite higher than expected PPI (and CPI from Thursday)

EUROPEAN MARKETS – Mixed. STOXX600 +0.04%, UK FTSE -0.05%, German DAX -0.07%, French CAC +0.38%,


  • The USD is higher at 97.21.
  • The Aussie dollar is stronger at US70.21

BONDS – 2-yr: -1 bp to 1.84%, 3-yr: -1 bp to 1.82%, 5-yr: -2 bps to 1.86%, 10-yr: -1 bp to 2.11%, 0-yr: -1 bp to 2.63%


  • Oil – WTI futures was us 1c to US$60.21 but was up 4.5% over the week as a storm expected in the Gulf of Mexico led to oil producers cutting production and evacuating rigs.
  • Iron Ore – CommSec has iron ore down US$70c or 0.6% to US$118.55 a tonne.
  • LME metals – Mostly stronger. Cu +0.24%, Ni +0.94%, Al +0.22%.


  • US economic data – June PPI +0.1% (consensus 0.0%, Prior +0.1%); Core PPI +0.3% (consensus +0.2%, Prior +0.2%)
  • Ford (+2.9%) rose after Volkswagen confirmed that they will increase cooperation aimed at developing autonomous vehicle technology.
  • Johnson & Johnson (-4.2%) on reports of a potential criminal probe into undisclosed health risks associated with its baby powder.
  • US-China trade – Substantial trade discussions haven’t started yet.
  • Cryptos – President Trump tweeted his disapproval of cyptocurrenies including Facebook’s (FB) upcoming Libra product
  • Chinese trade data – Bigger than expected surplus as exports fell another 7.3%.


  • European economic data – May industrial production +0.9% (expected +0.2%; last -0.4%) to be -0.5%yoy (expected -1.6%; last -0.4%)



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