The Overnight Report: Waiting For A Deal

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This story features OOH!MEDIA LIMITED, and other companies.
For more info SHARE ANALYSIS: OML
The company is included in ASX300 and ALL-ORDS

US markets traded sideways against an increasingly tenuous macro backdrop of higher oil prices and higher yields.

Under the surface, large-cap movers like Meta, AMD and Eli Lilly boosted the S&P500, while a rising number of stocks hit 52-week lows.

Small caps remain under pressure.

The Australian market recovered off intraday lows on a slight tick-up in the unemployment rate.

ASX200 futures are pointing to another weak start on Friday morning.

Good Morning,

On Thursday, the ASX200 fell -63.3 points pr -0.72% to 8702.00, with REITs down -1.95%, Materials off -1.46% and Telcos down -1.08%.

Staples, Healthcare and InfoTech enjoyed a positive session.

RBC Capital on Premier Investments’ ((PMV)) result release:

“Retail EBIT and sales pre-released. PA and Smiggle sales came in line with RBCe, with early first 7 weeks of 1H27 trading ~in line to marginally ahead on a LFL basis.

“CODB growth of +1.2% showed solid cost discipline in a tough environment, with GM tailwinds to come in 1H27 from USD hedging.

“Sector Perform, $11.50/share PT. 12x P/E looks attractive on face value with a clean balance sheet, but sluggish top line outlook and mixed brand momentum sees us remain on the sidelines for now.”

For more details and to stay in touch with which companies are reporting or going ex-dividend, check out the FNArena Calendar https://fnarena.com/index.php/financial-news/calendar/

Today’s Big Picture, J.L. Bernstein extract

Long-Term Rates Hit Their Highest Since 2007 

The 10-year Treasury yield sits at its highest since July 2007, the 30-year since June 2004.

Jefferies’ Mohit Kumar thinks most of the move came from traders getting forced out of losing bets.

Stocks are holding up fine, even with the 10-year well past the 4.5 level strategists had flagged as trouble.

Another Fed Voter Warms to More Hikes 

Philadelphia Fed President Anna Paulson votes this year and had been in the hold-steady camp.

Now she says underlying inflation isn’t budging, so the Fed may need to raise rates a bit more.

Traders see about two-in-three odds of an October hike, a bet few were making a month ago.

Oil Climbs as Iran Takes a Hard Line 

Iran’s president told the UN his country won’t allow free passage through the Strait of Hormuz under a US blockade.

Brent crude pushed past US$105, and even contracts for next August closed at their highest since May.

Traders are betting high oil sticks around, which keeps the Fed on edge.

CBA Daily Alert, extract

Summary: Oil prices increased sharply on reports that the Houthis attacked Saudi Arabia. The increase was despite US and Iranian negotiators exploring a phased deal that would see Tehran reopen the Strait of Hormuz and Washington lift its blockade of Iranian ports.

Higher oil prices combined with a hawkish tone from Fed speakers to send long-term US bond yields higher. Global equities were little changed. The Aussie dollar dipped slightly against the USD.

In Australia, we received labour force data which showed that employment increased by 39.5k in August, following a 15.9k decline in July. The unemployment rate rose to 4.6% as the participation rate increased strongly to 67.1% from 66.9% in July.

The data suggests the labour market continues to gradually loosen, but mainly from higher participation amid cost-of-living pressures. Employment growth and other labour market indicators remain solid and there are no signs of a sharp deterioration.

We still expect the RBA to increase the cash rate on 29 Sep by 25bps to 4.60%.

US sharemarkets were muted amid higher oil prices and bond yields, and as investors monitored a US-China summit. The Dow Jones index finished down -0.3%, the S&P500 index was flat and the Nasdaq index was also flat.

European sharemarkets closed lower on Thursday as oil prices resumed their rise, keeping euro zone bond yields near multi-year highs and denting risk appetite. The continent-wide FTSEurofirst 300 index ended down -0.5% and the UKFTSE100 lost -0.2%.

US government bond yields were higher again. Longer-dated US Treasury yields retreated from earlier highs after 30-year yields touched a more-than-20-year peak, though they stayed elevated as nerves over renewed inflation and further central bank rate hikes kept investors on edge.

The US 10-year Treasury yield rose 9 points to 5.21% while the US 2-year Treasury yield climbed 4 points to 4.93%.

Currencies were lower against the US dollar. The Aussie dollar dipped- 0.3% to US70.16 cents.

Global oil prices increased after the Houthi missile attack on Saudi Arabia revived supply disruption fears. Brent crude futures settled 3.4% higher at US$106.60 a barrel.

Base metal prices were mixed on Thursday. Copper futures rose 0.6% as supply worries at major Chilean mines offset a stronger US dollar. Meanwhile, aluminium futures slipped -0.2%.

Gold futures hit a one-week low, as a rise in oil prices and a hawkish shift in rhetoric by the Fed anchored expectations of higher interest rates. The futures settled -0.5% lower at US$4,298 an ounce.

Iron ore futures dropped -0.1% to settle at US$97.14 a tonne.

Looking Ahead: In the US, durable goods orders and the Michigan consumer sentiment survey will be released.

World’s bond markets sound the alarm on inflation, Nigel Green, deVere extract

Investors in every major economy face a brutal repricing of money as the global bond rout accelerates.

Brent crude has surged back above US$105 a barrel and the 10 year US Treasury yield has climbed to 5.15%, its highest since 2007, dragging bond markets across Asia, Europe and the Pacific down with it.

This is a synchronised global repricing of borrowing costs, and it’s gathering speed. Oil’s above US$105, the US economy’s running hot and central banks are tightening again. Every major bond market’s feeling the heat at once.

The damage is spreading fast. Japan’s 10 year yield has hit 3.08%, its highest since 1996. UK 10 year gilts touched 5.39% and German Bund yields reached 3.58%. Australian 10 year yields have climbed to levels last seen in 2011, while French borrowing costs this month hit their highest since 2008.

There’s nowhere to hide in sovereign debt right now. Europe, Asia and the US are being repriced together, so investors can’t simply rotate between regions for shelter.

When correlations snap together like this, diversification within bonds alone won’t protect a portfolio.

In the US, traders now see a better than 75% chance of another Federal Reserve hike in October, up from around 49% a week ago and under 10% a month ago. The Fed lifted rates to 3.75% to 4% last week, its first hike in three years, with 16 of 18 officials projecting at least one more move this year.

Pressure is building elsewhere too. Markets are pricing an 85% chance of a Reserve Bank of Australia hike on 29 September, and the Bank of Japan has already tightened.

An energy supply shock landing on overheating economies is the combination central bankers fear most. It forces their hand everywhere at once. Anyone positioned for a global easing cycle has had the ground pulled from under them.

Fresh US data added fuel. Business activity is expanding at its fastest pace in more than five years, input costs are climbing at the steepest rate in four years, and manufacturing readings hit 57 against expectations of 53.6.

Appetite for debt is thinning too. A five year Treasury auction this week cleared at 5.033%, well above the recent 4.186% average, with indirect bidders, a group including foreign central banks, taking just 54% versus a typical 65%.

Weak auctions are the warning light to watch. Supply’s exploding just as buyers step back, and the imbalance only resolves one way: higher yields.

Supply is surging on every front. US national debt topped US$40 trillion in August, governments worldwide are running large deficits, and US companies had issued almost US$1.7 trillion of bonds by August, up 27%, much of it funding the AI buildout.

The OECD warns surging yields are a major concern for public finances.

Governments borrow more, yields rise, interest bills swell and they borrow again. It’s a vicious circle, and political uncertainty keeps tightening it.

The fallout is reaching households and equities. The average US 30 year fixed mortgage rate has jumped to 7.26%, the highest since January 2025.

Once risk free rates sit above 5% in the world’s largest economy, every asset on the planet has to justify its price against that. Equities, property, private credit, emerging market debt. Nothing’s immune.

This is the moment for investors to review their exposure, broaden diversification across assets, regions and currencies, and make sure they’re not caught leaning the wrong way.

The world’s bond markets are screaming, and ignoring it could prove very expensive.

Corporate news in Australia:

• ACCC clears I Squared Capital’s $898m takeover of oOh!media ((OML)), with shareholder approval still required
• Healius ((HLS)) agrees to sell Agilex Biolabs to TPG-backed Novotech for around $150m
• Ellerston Capital is acquiring around 12% of Luxury Escapes from the Leibovich brothers at a $525m equity valuation
• Bathla’s administrators are preparing to sell subdivision and land bank assets after short-term funding ran out and construction stopped at another 13 sites
• KMD Brands ((KMD)) continues to consider takeover options following a more than -NZ$300m annual loss
• Channel Infrastructure is pursuing ExxonMobil’s New Zealand business and could partner with Vitol or Viva Energy ((VEA))
• Airwallex’s US IPO ambitions face increased scrutiny over its Chinese operations, employees and investor base
• Investors are backing Wiluna Mining’s proposed $180m IPO as strong gold prices support interest in the formerly insolvent miner

On the calendar today:

-CH Public Holiday

-EZ Aug M3

-US Aug Durable goods orders prelim

-US Sep Kansas Fed

-US Sep Uni Mich sentiment final

-MINERALS 260 LIMITED ((MI6)) FY26 earnings report

-PREMIER INVESTMENTS LIMITED ((PMV)) FY26 earnings report

-TEAMINVEST PRIVATE GROUP LIMITED ((TIP)) ex-div 1.55c (100%)

FNArena’s four-weekly calendar: https://fnarena.com/index.php/financial-news/calendar/

The Australian share market over the past thirty days…

For more detail go to FNArena’s Australian Broker Call Report, which is updated each morning, Mon-Fri.

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