The Overnight Report: CBA Beats, Powell In No Hurry

This story features COMMONWEALTH BANK OF AUSTRALIA, and other companies. For more info SHARE ANALYSIS: CBA

The number of corporate result releases in Australia is gradually increasing.

This morning CommBank’s ((CBA)) market update showed solid lending growth and sound credit quality underpinning a $5.13bn first-half profit, up 2% on the first half of last year and more importantly– better than expected.

SPI futures are suggesting CBA’s earnings beat’ might not necessarily be enough to keep the local index in the positive when trading starts at 10am today.

Fed Chair Powell affirmed the FOMC is in no rush to cut rates. The EU vowed “firm” countermeasures to US tariffs on steel and aluminium.

The US NFIB small business index edged lower in January.

By Chris Weston, Head of Research, Pepperstone

Good morning.

Long Europe remains the play on the floors, with all our EU equity indices in beast mode and trending higher with real venom.

Volumes across the EU cash markets have been upbeat, and we see DAX futures now at session highs, showing the bulls in full control.

The systematic and automated players out there would be unemotional about their long EU equity position, and this is arguably the best state of mind for any trader.

However, for the tactical and discretionary folk the risk rebuilds with Trump set to announce his reciprocal tariff rates, and EU leaders (notably comments from the EU Commission President) already defiant in laying down a retaliatory counter.

Traders also need to navigate the US CPI print (in the session ahead), while through the week we see German CPI and EU GDP prints.

The list of factors behind the bull trend in EU equity is extensive and there certainly is not just one smoking gun.

Many would have bought into the move higher in reaction to the perhaps surprising’ ability of equity and the USD to absorb what we’ve heard so far from tariff news.

Solid earnings (from EU corporates) and a view that perhaps we’re closer to trough European growth concerns are also offering tailwinds, while funds part switch from US equity on frustrations that the US AI/tech trade is lacking a buzz, with questions increasing around ongoing US exceptionalism.

Alternatively, Europe recorded the strongest risk-adjusted returns of any index/asset class in January – so for those that subscribe that it often pays to buy winners, Europe screened well from this standpoint.

In US equity a weaker cash open in the S&P500 was well supported, and while we’ve seen choppy conditions through the entirety of trade, we’ve seen the market close out unchanged and just off session highs.

Staples outperformed on the day, with Energy also working, with follow-through buying seen in crude, Nat Gas and gasoline.

Value as a factor worked well on the day, with materials and financials also finding better buyers.

Gold equity plays are modestly lower, with spot gold finding better supply into US$2940, seeing the sellers push the price into US$2881 before the buying support kicked back in.

Hard to put that down to anything more than a bout of profit-taking, which was always the risk given the recent trend and positioning.

Our US equity flows have centred on Tesla, with shares -6.3%, and with momentum clearly building to the downside, the short sellers are laying in and looking for rallies to add.

BYD is clearly impacting and making all the right moves in the EV space, with its upgrade to its “God’s Eye” feature including remote parking (from your phone) and autonomous overtaking.

Keeping a more luxury approach -and outside of the EV space– Ferrari screens well and for those who like to park their own cars, the share price also suggests likely to see further near-term upside risk.

We’re looking at a positive open across the Asian equity bourses, with the NKY225 back online after closing yesterday. The ASX200 eyes a flat open, with tailwinds to energy and materials although BHP’s ADR is modestly lower.

CBA’s 1H25 results will get a fair bit of attention locally, with a result that portrays the business in rude health.

The bank 1H NIMs, dividend and asset quality will sit well with investors, with cash earnings solid but in line with expectations.

The commentary and outlook from CEO Matt Comyn is hardly inspiring, but anyone observing the data trends in the Australian economy would hardly see them as a revolutionsolid numbers, but given valuation and ownership they needed to be.

On the calendar today:

-US Jan CPI

-Audinate Group ((AD8)) earnings report

-AGL Energy ((AGL)) earnings report

-Amotiv ((AOV)) earnings report

-Alliance Aviation Services ((AQZ)) earnings report

-Arena REIT ((ARF)) earnings report

-CommBank ((CBA)) earnings report

-Computershare ((CPU)) earnings report

-Dexus Industria REIT ((DXI)) earnings report

-Evolution Mining ((EVN)) earnings report

-HomeCo Daily Needs REIT ((HDN)) earnings report

-Imdex ((IMD)) earnings report

-ResMed ((RMD)) ex-div 5.96c

(and more)

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

Corporate news in Australia:

-AFR reports KKR is set to revise its $2.2bn bid for Perpetual after the deal was hindered by a significant tax bill

-Retail Food Group ((RFG)) is shutting down Michel’s Patisserie, converting stores to other brands like Gloria Jean’s and Donut King

-Macquarie Group ((MQG)) exits Net-Zero Banking Alliance

-Major banks will halt regional closures until 2027 under Albanese government pressure

-Banks agreed to higher costs for Australia Post banking services to avoid a government-imposed regional levy

– ANZ Bank ((ANZ)) has agreed to join a banking venture run by Australia Post that aims to mitigate branch closures across the country. Macquarie and HSBC will begin negotiations to also join

By deVere Group CEO Nigel Green

Gold’s record-breaking rally shows no signs of slowing, with two new catalysts also now fueling the fire.

The bullish prediction is based on the potential revaluation of America’s gold reserves and a major policy shift in China allowing insurers to invest in bullion.

The United States currently values its vast gold holdings at an outdated US$42 per ounce. However, leading hedge funds and financial insiders are increasingly speculating that the Treasury could revalue these reserves at market pricescurrently around US$2,800 per ounce.

If enacted, this move could inject an estimated US$800bn into the Treasury General Account, reducing reliance on bond issuance and strengthening confidence in gold as a monetary asset.

Re-marking gold to its real market value could be a transformative financial event.

It would not only reinforce gold’s role as a core store of value but also amplify its already accelerating price surge.

Meanwhile, a game-changing development in China is setting the stage for even more demand.

For the first time, Beijing has approved a pilot program allowing insurers to invest in gold, unlocking billions in potential inflows into the market.

With China’s central bank already leading global gold acquisitions, this move will intensify an existing trend of nations shifting away from US dollar assets.

China’s green light for insurers will supercharge demand.

This comes on top of central bank buying that is already at its highest level in decades.

These two factors alone would be enough to send gold prices soaring. But they’re hitting at a time when macroeconomic conditions already favor a prolonged rally in precious metals.

Inflationary pressures remain stubbornly high, exacerbated by Trump’s tariff policies, which threaten to drive prices even higher.

The imposition of new tariffs on China and other key trading partners is not only stoking fears of a broader trade war but also fueling a run on safe-haven assets like gold.

At the same time, central banks around the world are accelerating their purchases of gold at a pace unseen in decades.

China, in particular, has been steadily increasing its reserves, with the People’s Bank of China expanding its holdings for a third consecutive month in January.

The war in Ukraine, instability in the Middle East, and growing tensions in the South China Sea are all contributing to an environment of uncertainty, further boosting gold’s safe-haven appeal.

With all these factors converging, gold’s path to new all-time highs appears inevitable.

The combination of US gold revaluation speculation, China’s insurer-driven demand, aggressive central bank buying, inflationary pressures, and geopolitical uncertainty is creating a perfect storm for gold bulls.

The momentum currently appears unstoppable. We expect that this current record rally still has a way to run.

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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