The Overnight Report: Enough (For Now)

This story features SIMS LIMITED, and other companies. For more info SHARE ANALYSIS: SGM

Good morning.

Markets have reduced the implied odds of a -50bps follow up cut to the Fed’s Sep 18 one following overnight remarks from Fed chair Powell.

That change in Fed rate cut projection has held back the day’s rally in US equities.

In Europe, expectations for back-to-back September and October ECB rate cuts have been further fuelled by comments to parliament by ECB chief Lagarde on Monday.

China’s stock market has ripped again in front of today’s start to the Golden Week holidays, gains since the start of last week now in excess of 20%.

AUD and NZD have held their own against a broadly stronger USD.

On the calendar today, New Zealand’s Quarterly Survey of Business Opinion and Austria’s Retail Sales are the local highlights Tuesday, and US JOLTS data tonight, with probably a secondary impact from the Manufacturing ISM update.

In commodities, the initial boost to iron ore on last week’s news, seeing the Singapore futures contract back up through US$100/t, was extended at the open with a high of US$113.50, before fading to the current level around US$107.

Elsewhere, with the exception of thermal coal (+3.8%) most other commodities are lower with the LMEX index of base metals off -0.9% led by falls of -1.3% for both copper and aluminium.

Little change in oil pricing today compared to recent volatility, while gold is down -US$26 to US$2,636/oz.

In bond markets, the US yield curve has bear flattened on Powell’s remarks, with 2s +8.0bps and 10s currently +3bps at 3.78%.

On the calendar today:

-New Zealand Aug building approvals

-Australia Aug retail sales, building approvals

-Japan Tankan 3Q

-China Public Holiday

-US Aug JOLTS, ISM Manufacturing

-Sims ((SGM)) ex-div 10c (100%)

-The Lottery Corp ((TLC)) AGM

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

Corporate news in Australia:

-REA Group ((REA)) has officially given up on acquiring the UK’s Rightmove, for now

-Qatar Airways to acquire a 25% stake in Virgin Australia from Bain Capital, intensifying competition with Qantas Airways ((QAN)), pending FIRB approval

-AGL Energy ((AGL)) signs a new electricity supply deal for the Portland smelter, allowing for reduced consumption during peak demand

-Louis Dreyfus Company (LDC) raises its takeover bid for Namoi Cotton ((NAM)) to 68c per share, while Namoi’s directors support Olam’s competing bid under regulatory review

-Wesfarmers ((WES)) is reportedly interested in Mineral Resources’ ((MIN)) Perth Basin assets, but competition is expected from Gina Rinehart’s Hancock Prospecting and Mitsui, possibly teaming up with Beach Energy ((BPT))

-Seven West Media ((SWM)) and Network 10 are negotiating a $15m to $20m deal to acquire Southern Cross Austereo’s ((SXL)) regional TV stations

-Mesoblast ((MSB)) will reportedly raise funds via convertible notes from its largest shareholder if its drug Ryoncil is approved by the FDA

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.)

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