Daily Market Reports | 8:33 AM
This story features TRANSURBAN GROUP LIMITED, and other companies.
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The company is included in ASX20, ASX50, ASX100, ASX200, ASX300 and ALL-ORDS
US markets nudged higher as US Treasury yields retreated from their highest level in around 24 years.
Oil prices ticked higher as the US Administration moved to deploy another aircraft carrier to the Middle East, while President Trump again raised the prospect of renewed military action against Iran after the midterms.
The Australian market collapsed under the weight of selling yesterday, with the ASX200 falling almost -2% as higher bond yields weighed heavily on equities.
ASX200 futures are pointing to a positive start for Friday.
| World Overnight | |||
| SPI Overnight | 8678.00 | + 45.00 | 0.52% |
| S&P ASX 200 | 8614.40 | – 174.90 | – 1.99% |
| S&P500 | 7666.45 | + 14.91 | 0.19% |
| Nasdaq Comp | 26871.60 | + 10.53 | 0.04% |
| DJIA | 50926.56 | + 20.51 | 0.04% |
| S&P500 VIX | 16.39 | + 0.05 | 0.31% |
| US 10-year yield | 5.24 | – 0.06 | – 1.06% |
| USD Index | 102.03 | + 0.56 | 0.55% |
| FTSE100 | 10428.27 | – 177.73 | – 1.68% |
| DAX30 | 24939.35 | – 259.84 | – 1.03% |
Good Morning,
The Australian market was shellacked yesterday to start the month of October, after having ended September on a positive note (end-of month Window dressing was on display).
On the first day of the new month, the ASX200 fell -174.9 points or -1.99% to 8614.40.
Selling was pronounced in Staples, Healthcare, REITs and Materials, with large caps hit heavily.
Rising bonds yields and persistent sticky inflation remain a headwind for Australian stocks, as is, potentially, the unwinding of the yen carry trade.
But bond yields are rising globally, “Mortgage Rates Surge, Notching Largest Weekly Gain in Four Years”.
Sound familiar? That is a headline from today’s Wall Street Journal.
Fresh from the FNArena inbox, CLSA on Transurban ((TCL)):
“Transurban (TCL) has agreed to acquire additional interests in NWRG and WCX for A$4.5bn at an implied FY28 EV/Ebitda multiple of 15x.
“The ACCC will review the deal closely, but we believe it will be approved. The deal is positive for TCL, but it may put some more pressure on FY28 DPS.
“TCL’s Drive TN consortium has also reached commercial close on the I-24 project in Tennessee (TN). TCL expects to fund both deals with existing balance sheet capacity.
“We lower our PT from A$14.00 to A$13.50 and maintain our Hold rating.”
For more details and to stay in touch with which companies are reporting are going ex-dividend, check out the FNArena Calendar https://fnarena.com/index.php/financial-news/calendar/
Today’s Big Picture, J.L. Bernstein extract
Treasurys Went From Selloff to Safe Haven
The 10-year Treasury yield touched 5.34% this morning, its highest since April 2002, then eased to about 5.24%.
Investors dumped French, Italian and Greek bonds and moved into US and German debt instead.
For all the worry about US debt, Treasurys are still where money goes when Europe gets shaky.
Oil Is Back Over US$100
Brent crude topped US$102 as Chinese refiners halted October fuel exports and a third US aircraft carrier headed to the Middle East. Actual barrels are tighter still: oil for physical delivery settled around US$121 on Wednesday.
Factories are paying up too, with the ISM prices-paid index at 77.9 versus the 72 economists expected.
AI Led the Comeback
A Bloomberg report that Anthropic could go public as soon as mid-November gave tech a midday lift.
Accenture $ACN rallied after saying AI is driving more work from big clients like FedEx and BP.
Revenue of US$18.7 billion came in above its own guidance range.
That’s AI spending turning into paid client work, which is exactly what this trade needs to see.
ANZ Bank, Australian Morning Focus extract
US equity markets managed small gains, as bond yields eased from a multi-decade high, despite higher oil prices and firm US data keeping inflation concerns elevated. At the time of writing, the S&P500 was up 0.2%.
The EuroStoxx50 ended its session down -1.5%, while the FTSE100 lost -1.7%. The yield on the US 10yr note fell around -3.6bp to 5.24%. WTI lifted 3.8% to US$93/bbl. Gold was weaker at US$4,174.2/oz.
US ISM manufacturing index was little changed at 54.5. The underlying details were firm. While the production index eased -1.6pts to 56.7, new orders rose -1.6pts to 55.3 and inventories fell 2.0pts to 48.6, all pointing to stronger production ahead.
The prices index jumped 6.8pts to 77.9, reflecting higher energy prices, though it remained below the level reached in April.
US initial claims were 197k in the week ended 26 September, below consensus. The four-week moving average fell to 200k, continuing to trend lower and signalling that US labour market conditions are improving.
US construction spending rose 0.9% m/m, the largest monthly gain since November 2023. Data centre construction continued to surge, up 7.5% m/m and 73% y/y. Total construction spending is now trending higher, having been in decline since late 2024.
Robust US data: Recent releases reinforce that US economic momentum is accelerating and becoming increasingly broad-based. This week, data has revealed solid growth in manufacturing and construction, typically interest rate-sensitive sectors.
Revisions to GDP and personal income data this week showed the US consumer in better health than previously thought. The four-week moving average of initial jobless claims continues to trend lower and is around post-pandemic lows.
Continued signs of strengthening demand pose a challenge to policymakers’ assessment that the stance of monetary policy remains restrictive and suggest that the neutral rate is rising.
Treasury Yields Could Move Higher As Strong US Growth Persists, David Clewell, T.Rowe Price extract
- The 5% level on the U.S. 10-year Treasury yield has been an important psychological threshold for investors, effectively marking the upper end of the range since the post-covid period. Once a key technical level like this is breached, systematic and quantitative positioning can amplify the move and lead to further selling.
- That said, it is important to distinguish the speed and magnitude of the recent move from the underlying fundamentals. The sell-off was unusually sharp, but the broader direction is consistent with our view that long-end yields can move higher. Given the resilience of U.S. economic growth, there is a credible case for the 10-year Treasury yield to rise towards 5.5% to 6%.
- Positioning also played an important role. As yields approached 5%, investors had begun to build longer-duration positions. Stronger-than-expected economic data, together with a weaker Treasury auction, then provided the catalyst for those positions to unwind.
- In my view, the previous sell-off was primarily a growth- and inflation-driven move rather than a debasement trade. The data pointed to strength in both real activity and inflation, which is a meaningful combination for the bond market. Despite the size of the move in yields, the broader market reaction remained relatively orderly.
- The Bank of Japan faces a delicate balancing act. Its objective is to continue moving Japan away from a deflationary mindset without tightening policy so quickly that it damages the economy. In that sense, the BOJ may need to remain somewhat behind the curve as the economy adjusts to a structurally different inflation environment.
- Japan also has limited recent experience of operating with interest rates at these levels, so policymakers need time to assess how the economy responds. Allowing one or two quarters of data between policy moves gives the BOJ an opportunity to evaluate the impact of higher rates before tightening further. That is why a pace of around two hikes a year can be consistent with its broader policy objectives.
- In my view, the most recent rate increase was partly driven by the need to support the yen. However, it was still a relatively dovish hike. The BOJ is balancing three considerations: avoiding unnecessary damage to the economy, responding to incoming data, and sustaining the shift from a deflationary to an inflationary mindset.
- From an investment perspective, I currently find Japanese equities more compelling, particularly when USD/JPY is above roughly 152. The 152 level is significant because it is broadly in line with the foreign-exchange assumption in the Tankan survey for large Japanese companies. When USD/JPY is above that level, the weaker yen can support upward earnings revisions for exporters.
Bond Market Pricing Better-Than-Expected Economic Growth, Ed Yardenu & Elias Griepentrog, Yardeni QuickTakes extract
Bond yields rose yet again On Tuesday (US) even though September’s PCED inflation report showed some improvement, which was due mostly to new measurement procedures.
Inflation remains about a percentage point above the Fed’s 2.0% target. Other economic indicators today confirmed that the economy and the labour market are doing very well and strengthened the case for more Fed rate hikes.
Yesterday’s dovish suggestion by NY Fed President John Williams that a pause in rate hikes might make sense was all but forgotten today.
The most optimistic explanation for the backup in bond yields is that it reflects better-than-expected economic growth, suggesting the economy’s R-Star (i.e., the neutral interest rate) is higher than Fed officials thought at the beginning of the year.
Back then, they mostly agreed that the federal funds rate was still slightly restrictive, i.e., above the neutral rate. Now, they agree with Fed Chair Kevin Warsh that September’s 25bps rate hike “removed a dose of accommodation.”
That implies that the federal funds rate is below neutral.
No wonder the 2-year Treasury yield remained 100bps above the federal funds rate today.
Federal funds futures are pricing in three to four 25bps rate hikes over the next 12 months, including roughly two over the next six months.
Corporate news in Australia:
- Transurban ((TCL)) agrees to acquire CPPIB’s stakes in three Sydney toll road assets for -$4.5bn, increasing its ownership across key parts of its Sydney network
- Lynas Rare Earths ((LYC)) agrees to acquire Meteoric Resources ((MEI)) for -$968m, adding the Caldeira rare earths project in Brazil to its growth portfolio
- Ampol ((ALD)) agrees to acquire electric vehicle charging operator Evie Networks for -$225m, significantly expanding its national EV charging network
- KKR cancels $12.4m of Colonial First State executive equity as the wealth manager’s prolonged sale process continues
- Kent and Desley Walker acquire the North Sydney Hotel for almost -$30m
- PwC Australia acquires Advancy’s Australian due-diligence business, adding a six-person team focused on private equity clients
- Stockland ((SGP)), GIC and other major investors submit bids for Cerberus-owned land lease community operator Lincoln Place, which is expected to fetch around $1bn
- OD6 Metals ((OD6)) seeks $5m through a discounted share issue to fund drilling at its Nevada fluorspar project and is considering a US-focused rebrand
- GM Steel is seeking equity investors for a proposed Queensland steel plant, ahead of a planned $250m-$300m capital raising to fund construction
- Firmus reportedly prices its IPO at $11 per share, targeting a $7.2bn raising and valuation of around $44bn
- SharonAI secures US$356m of GPU-backed private debt to fund the expansion of its AI infrastructure
On the calendar today:
-NZ Sep ANZ consumer confidence
-JP Sep Tokyo CPI
-CH Public Holiday
-EZ Sep CPI (prelim)
-US Aug Durable goods (final)
-US Sep Non-farm payrolls
-NRW HOLDINGS LIMITED ((NWH)) ex-div 14.50c (100%)
-STEAMSHIPS TRADING CO. LIMITED ((SST)) ex-div 9.33c
FNArena’s four-weekly calendar: https://fnarena.com/index.php/financial-news/calendar/
| Spot Metals,Minerals & Energy Futures | |||
| Gold (oz) | 4177.06 | + 19.57 | 0.47% |
| Silver (oz) | 60.97 | + 0.56 | 0.93% |
| Copper (lb) | 6.52 | – 0.06 | – 0.91% |
| Aluminium (lb) | 1.45 | – 0.01 | – 0.67% |
| Nickel (lb) | 7.06 | – 0.13 | – 1.83% |
| Zinc (lb) | 1.79 | – 0.01 | – 0.58% |
| West Texas Crude | 92.81 | + 2.49 | 2.76% |
| Brent Crude | 102.18 | + 4.33 | 4.43% |
| Iron Ore (t) | 96.59 | 0.00 | 0.00% |
The Australian share market over the past thirty days…
| Index | 01 Oct 2026 | Week To Date | Month To Date (Oct) | Quarter To Date (Oct-Dec) | Year To Date (2026) |
|---|---|---|---|---|---|
| S&P ASX 200 (ex-div) | 8614.40 | -0.58% | -1.99% | -1.99% | -1.15% |
| BROKER RECOMMENDATION CHANGES PAST THREE TRADING DAYS | |||
| BPT | Beach Energy | Upgrade to Neutral from Underperform | Macquarie |
| CHN | Chalice Mining | Downgrade to Lighten from Hold | Ord Minnett |
| CIP | Centuria Industrial REIT | Upgrade to Outperform from Neutral | Macquarie |
| CQR | Charter Hall Retail REIT | Upgrade to Outperform from Neutral | Macquarie |
| CXO | Core Lithium | Downgrade to Lighten from Buy | Ord Minnett |
| DLI | Delta Lithium | Upgrade to Buy from Hold | Ord Minnett |
| DRO | DroneShield | Upgrade to Hold from Lighten | Ord Minnett |
| DRR | Deterra Royalties | Upgrade to Buy from Accumulate | Ord Minnett |
| Upgrade to Buy from Neutral | UBS | ||
| DYL | Deep Yellow | Upgrade to Buy from Hold | Ord Minnett |
| FFM | FireFly Metals | Upgrade to Buy from Hold | Ord Minnett |
| GPT | GPT Group | Upgrade to Outperform from Neutral | Macquarie |
| HDN | HomeCo Daily Needs REIT | Upgrade to Buy from Hold | Bell Potter |
| Upgrade to Outperform from Neutral | Macquarie | ||
| IGO | IGO Ltd | Upgrade to Buy from Accumulate | Ord Minnett |
| INA | Ingenia Communities | Downgrade to Hold from Accumulate | Ord Minnett |
| JHX | James Hardie Industries | Downgrade to Neutral from Buy | Citi |
| KAR | Karoon Energy | Upgrade to Outperform from Neutral | Macquarie |
| LTR | Liontown | Upgrade to Buy from Hold | Ord Minnett |
| Downgrade to Hold from Buy | Ord Minnett | ||
| NEM | Newmont Corp | Downgrade to Hold from Buy | Ord Minnett |
| PLS | PLS Group | Upgrade to Buy from Accumulate | Ord Minnett |
| PNI | Pinnacle Investment Management | Upgrade to Buy from Neutral | UBS |
| REA | REA Group | Upgrade to Hold from Sell | Bell Potter |
| SM1 | Synlait Milk | Upgrade to Outperform from Underperform | Macquarie |
| VCX | Vicinity Centres | Upgrade to Outperform from Neutral | Macquarie |
For more detail go to FNArena’s Australian Broker Call Report, which is updated each morning, Mon-Fri.
All overnight and intraday prices, average prices, currency conversions and charts for stock indices, currencies, commodities, bonds, VIX and more available on the FNArena website. Click here. (Subscribers can access prices on the website.)
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