The Overnight Report: Opposite Tuesday

This story features CAPRAL LIMITED, and other companies. For more info SHARE ANALYSIS: CAA

One can only guess what exactly those market participants were thinking when they piled into local equities yesterday afternoon.

The market is always right, right?

Today will be opposite day as US equities responded swiftly to confirmation of –you’re never going to believe itTrump tariffs on Mexico, Canada and China.

Another worry is economic indicators in the US are pointing towards a noticeable loss in positive momentum for the US economy.

Last night, the headline manufacturing ISM index fell -0.6pts to 50.3, only narrowly staying in positive territory.

New orders fell into contractionary territory, down -6.5pts to 48.6, signalling weak demand.

The Atlanta Fed’s GDPNow model estimates Q1 growth at -2.8% on saar basis.

President Trump is set to deliver an address to a joint session of Congress later this afternoon.

Good morning.

US equities sold off overnight (see also commentary above), but European equities reached for fresh all-time highs on the prospect for increased defense spending.

Oil prices are likely to remain under pressure as the market digests OPEC’s decision to proceed with production hikes.

The US 10yr yield is now down -4.6bps to 4.16% (low 4.16%; high 4.26%). The US 2yr now -2.1bps to 3.96% (low 3.96%; high 4.04%).

As highlighted by economists at National Australia Bank this morning, Fed funds pricing of cuts has incrementally lifted to -70.1bps of cuts by the end of 2025, from -68.5bps on Friday.

Details from the abovementioned US ISM report are described as “dreadful”.

Euro area CPI inflation in February fell by one-tenth to 2.4% for the headline measure and 2.6% for the core measure, but both were one-tenth higher than expected.

Services inflation fell to 3.7%, after being sticky near the 4% mark for over a year, and higher than that earlier, which will provide some comfort to the ECB that domestic inflation pressures are moving in the right direction, according to those NAB economists.

Base metals rose amid signs of improved factory activity in China. The country’s official manufacturing Purchasing Managers Index unexpectedly returned to expansionary territory.

This comes ahead of the National People’s Congress, China’s biggest political gathering of the year.

Expectations are for further stimulus to support the Chinese economy (see also Trump tariffs).

Nickel led the sector higher on data last week that showed more than 8kt of nickel was ordered out of LME warehouses on Thursday, driven by requests for the metal in Asia.

On the calendar today:

-New Zealand Jan Building Permits

-Australia 4Q BoP

-Australia Feb RBA mins

-Jan retail sales

-Japan Jan unemployment

-Eurozone Jan employment

-Capral ((CAA)) ex-div 40c

-Evolution Mining ((EVN)) ex-div 7c (100%)

-Fleetwood ((FWD)) ex-div 11.50c (100%)

-GR Engineering Services ((GNG)) ex-div 10c (100%)

-Ironbark Capital ((IBC)) ex-div 1.20c (100%)

-Iluka Resources ((ILU)) ex-div 4c (100%)

-Karoon Gas ((KAR)) ex-div 5c

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

Corporate news in Australia:

-Westpac’s ((WBC)) tech overhaul under CEO Anthony Miller may lead to the elimination of sub-brands like St. George Bank and BankSA

-Yet another contract win from Pro Medicus ((PME)), this time a $40m imaging deal with LucidHealth

– Sandfire Resources ((SFR)) exits Avrupa Minerals JV after weak drilling results

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.

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.)

(Readers should note that all commentary, observations, names and calculations are provided for informative and educational purposes only. Investors should always consult with their licensed investment advisor first, before making any decisions. All views expressed are the author’s and not by association FNArena’s – see disclaimer on the website)

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