The ASX 200 is down 37 points in mid morning trade after trade dispute escalates. Gold and h’care ok but Energy, Materials & Financials all ↓. RIO result overshadowed. Downdates from BGA, GNC and ORA. LYC reg update. Retail sales and US jobs ahead #ausbizm1m2m3TODAY

  • Economic data – Retail Sales, PPI
  • BoJ Monetary Policy Meeting Minutes


  • UK Construction PMI
  • European – Retail Sales, PPI
  • US economic data – Nonfarm Payrolls, Avg. Hourly Earnings, Unemployment Rate, Average Workweek, Trade Balance, Factory Orders, Univ. of Michigan Consumer Sentiment – Final


  • RIO Tinto (RIO) — Underlying EBITDA of $10.3bn ($10bn expected) and EBITDA margin of 47%. Financial performance was driven by our Pilbara operations with a 72% EBITDA margin, underpinned by strong iron ore prices. Mixed result as revenue a little under expectations but underlying EBIT better.


  • Monadelphous Group (MND) – Awarded a major construction contract with RIO for the West Angelas Deposits C and D Project, located in the Pilbara region of Western Australia. The $100m+ contract includes the supply and installation of structural, mechanical, piping and electrical and instrumentation works associated with the construction of new iron ore facilities, as well as modifications to existing plant. The work will commence immediately and is expected to be completed in April 2021.
  • GrainCorp (GNC) – Downdated guidance. Now expects to report underlying EBITDA for FY19 in the range of $65-85m and an underlying net loss after tax in the range of $70-90m. FY negative EBITDA impact from the ongoing disruption of international grain trade flows and Australian wheat markets now $60-70m (up from $40m reported on 18 April 2019).
  • Bega Cheese (BGA) – Market downdate. FY guidance for normalised EBITDA now $113-$117m (previously lower end of $123-$130m range). Reflects cost impact of new initiatives. BGA also indicated record milk intake in FY2019 of 1.06 billion litres (up 41% on pcp) and increased market share of the Australian milk pool from 8.1% to 12.4%. The increase in milk intake has been achieved in a market that has contracted by 7.9% (733ml) due to the drought and exit of farmers. There has also been greater competitive pressure from processors and this pressure has never been stronger than in the last quarter of FY2019 and in setting the FY2020 milk price from 1 July 2019.
  • AGL – Plant closure update. First unit at Liddell will close in April 2022. But remaining three units will close in April 2023, supporting system reliability throughout the 2022-23 summer months. Torrens A was previously planned to close November 2019. New proposal is for the first two Torrens A units to be closed in September 2020, a third unit closed in September 2021 and the final unit in September 2022. AGL also said it was continuing to progress a series of power firming projects in NSW including the 100MW upgrade to the Bayswater power station, assessing the feasibility of 250MW of pumped hydro at Bells Mountain and seeking approvals for a 250MW gas power station at Newcastle. In South Australia, it is currently investigating the feasibility of a 250MW pumped hydro plant at Kanmantoo and earlier this year delivered the 30MW ESCRI battery on the Yorke Peninsula as part of a joint venture with Electranet.
  • Orora (ORA) – Significant Item expense of $54.8m, includes $35.0m provision for additional decommissioning costs associated with the former Petrie Mill site and $20.8 million provision for restructuring and impairment charges




US EQUITIES – S&P500 -27 (-0.90%), Dow Jones -281 (-1.05%), NASDAQ -64 (-0.79%)

Main themes

  • Dow saw 627 point range after Trump tweeted about 10% tariff on remaining $300bn of Chinese imports, starting 1 September.
  • Growth in manufacturing slowing, ISM index down to 51.2
  • Oil was down 7.9% to US$53.95.

EUROPEAN MARKETS – Mixed. STOXX600 +0.50%, UK FTSE -0.03%, German DAX +0.53%, French CAC +0.70%,


  • The USD is a touch lower 98.40.
  • The Aussie dollar is also lower at US67.99c

BONDS – 2-yr: -16 bps to 1.72%, 3-yr: -17 bps to 1.67%, 5-yr: -17 bps to 1.68%, 10-yr: -13 bps to 1.89%, 30-yr: -9 bps to 2.44%


  • Oil – WTI futures were down 7.9% to US$53.95 after the tariff news.
  • Gold futures were up 1% to US$1,450.90 an ounce.
  • Iron Ore – CommSec has iron ore down US$4.45 or 4.8% to US$113.90 a tonne.
  • LME metals – Mixed. Cu -0.70%, Ni +1.20%, Al -1.11%.


  • US earnings – Amcor (-0.85%), Archer-Daniels (+0.17% and then 2.29% in after-hours)), General Motors (-0.47%), Kellogg (+9.29%), Verizon (-0.02%), Yum! Brands (+3.93%). After The Close – Fluor (+11.03%), U.S. Steel (+3.65%)
  • Economic data – Weekly Initial Claims 215,000 (consensus 215,000; prior 207,000) and Continuing Claims 1.699m (prior 1.677m); June Construction Spending -1.3% (consensus 0.4%; prior -0.5%) and July ISM Manufacturing Index 51.2 (consensus 51.9; prior 51.7)
  • North Korea reportedly launched two short-range missiles today, making for the third launch over the past two weeks.
  • US-China trade negotiations – Reports that the 13th round of trade trade talks will take place in September.
  • Chinese data – July Caixin Manufacturing PMI 49.9 (expected 49.6, previous 49.4)
  • Japanese data – July Nikkei Manufacturing PMI 49.4 (expected 49.6, previous 49.6).
  • Bank of England – Voted unanimously to keep the bank rate and asset purchases unchanged at their respective 0.75% and GBP435 bln.
  • European data – July Manufacturing PMI 46.5 (expected 46.4, previous 46.4).

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