Daily Market Reports | 8:56 AM
This story features BAPCOR LIMITED, and other companies.
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The company is included in ASX200, ASX300 and ALL-ORDS
US markets traded sideways post the latest JOLTs data and ahead of tomorrow's FOMC decision.
After a hawkish hold from the RBA yesterday, providing yet another reason for share market weakness, on Wednesday morning ASX200 futures are pointing to a positive start.
| World Overnight | |||
| SPI Overnight | 8614.00 | + 24.00 | 0.28% |
| S&P ASX 200 | 8585.90 | – 38.50 | – 0.45% |
| S&P500 | 6840.51 | – 6.00 | – 0.09% |
| Nasdaq Comp | 23576.49 | + 30.58 | 0.13% |
| DJIA | 47560.29 | – 179.03 | – 0.38% |
| S&P500 VIX | 16.85 | + 0.19 | 1.14% |
| US 10-year yield | 4.19 | + 0.01 | 0.34% |
| USD Index | 99.21 | + 0.14 | 0.14% |
| FTSE100 | 9642.01 | – 3.08 | – 0.03% |
| DAX30 | 24162.65 | + 116.64 | 0.49% |
Good Morning,
Yesterday, the ASX200 fell -49pts or -0.6% to 8,586, with all 11 sectors in the red.
Tech, down -1.3%, health care and energy led the declines, while banks finished mixed.
What happened overnight, NAB Markets Today Research
US JOLTS data for September and October was mixed. Openings were higher at 7658k in October, against analyst expectations near 7200k.
But the increase in openings in the past couple of months stands at odds with measures of job ads. Meanwhile, the quits rate dipped to 1.8%. apart from a brief spike lower in 2020, that is the lowest reading since 2014. Layoffs also rose a tenth to 1.2%, around where they were prior to the pandemic.
The JOLTS data did spur some move higher in yields, but over the day moves have generally been small. US 2yr yields are 3bp higher at 3.61%, while 10yr yields are 2bp higher at 4.18%. After leading the move higher in yields yesterday, European 10yr yields were generally 1-3bp lower. German 10yr yields slipped 1bp to 2.85%.
FX moves were again modest outside of an underperforming yen. The USD was 0.2% higher on the DXY, up 0.6% against the yen and 0.1% against the euro.
BoJ Governor Ueda said in an interview with the FT that “We are closer to 2% inflation on a sustained basis” but the remarks left expectations for a December hike little changed near 90% and did little to support the yen.
Ueda also said that the recent pace of increases in Japan’s long-term bond yields is “somewhat fast,” while adding long-term yields should be determined by the market in principle.
The AUD did find some support from the more hawkish RBA and higher yields, but even so managed just a 0.25% gain. That AUD touched an intraday high of 0.6654 overnight.
Kevin Hassett, the front runner to become the next Fed Chair, said at an event hosted by the WSJ there is “plenty of room” to cut rates. “If the data suggests that we could do it, then—like right now—I think there’s plenty of room to do it”.
And when pressed indicated that could include a larger-than-quarter-point cut. While he has indicated he would respond to the data and he would not bow to political pressure to decide whether to cut interest rates, if he becomes the next chair, it is clear on the current backdrop he is comfortable with more easing than many FOMC participants.
Locally yesterday, the RBA held rates in an unanimous decision and delivered on a more hawkish framing. The post meeting statement noted risks to inflation had tilted to the upside. Yields moved higher through the press conference.
Bullock in the press conference said “The question is, is it just an extended hold from here or is it possibility of a rate rise?” and characterised the decision as “a bit of a pause now to make sure that we haven’t eased a bit far perhaps.”
3 year yields were around 10bp higher with the move largely occurring through the presser. There are now about 7bp priced for February, a full hike by June, and 46bp by the end of 2026.
RBA: Watch, Wait and Worry (a lot) as it lays ground work for rate hikes, RBC Capital Markets extract
As universally expected, the RBA left the cash rate unchanged at 3.60% and while it is prepared to wait for further data to gauge whether the pick-up in inflation is more persistent with risks now “tilted to the upside”, the tone of the short statement erred hawkish.
It suggested the risks to the outlook are no longer balanced with inflation higher, private demand strengthening, housing activity and prices rising, easier financial conditions and unit labour costs still high.
The press conference left no doubt about these risks with the Governor noting while a rate hike was not “explicitly discussed”, the circumstances in which higher rates would be needed was debated. She added the Board is “uncomfortable” with the inflation pulse and the central case now is whether the RBA is on an ”extended hold” or there are “rate hikes.”
As we highlighted this week, the onus is shifting to data to stop the RBA from hiking. The key data ahead of the 2-3 Feb meeting will need to at least show signs of stabilisation (rather than further labour market tightening or acceleration in inflation) to prevent a move to a more restrictive policy stance in 2026.
Given the domestic data over the last 5 weeks since the board last met have universally surprised to the upside –-inflation, housing, labour market, household spending-– and materially in some cases, the RBA had little choice but to acknowledge that today.
Coupled with repeating the labour market errs “a little tight” and suggesting that “the risks to inflation have tilted to the upside”, there were warnings in today’s communication.
It is prepared to wait for more data “to assess the persistence of inflationary pressures” but the stronger starting point for inflation, little spare capacity in goods or the labour market, stronger private demand and elevated unit labour costs means the RBA is clearly laying the groundwork for a shift in bias, if necessary, and a more restrictive policy stance in 2026.
This is both prudent and appropriate. The Governor’s press conference was punchy as she confirmed the data and circumstances have changed, the board is “uncomfortable” with the pace of inflation and repeated on several occasions that mid-point and sustainable within target inflation was its focus.
Indeed, the press conference suggested the bar to staying on hold is rising with the Governor’s closing comment confirming “the board will take action” if inflation continues to move in the wrong direction.
The RBA is waiting for key upcoming data; labour market (11 Dec and 22 Jan), inflation (Nov CPI on 7 Jan and Q4 on 28 Jan) as well as the various consumer and housing indicators in January. Key in its deliberations is how broad based and persistent the recent pick-up in inflation is.
While the RBA has suggested it may be more noise than signal, it now sounds less sure and we have argued over the last couple of years the leading indicators of more persistent underlying inflation –-high compensation of employees (particularly public sector), elevated underlying labour costs and stagnant productivity-– are challenging.
This is now colliding with an economy with little if any capacity and firming growth. Feb may well be live.
While we’ve ended up with an unequivocally hawkish read-through of today’s RBA communication, bonds initially saw a relief rally on the statement release (3yr futures briefly hit 95.95 from 95.89 prior).
Markets had clearly been braced for a more stridently hawkish statement tone. Most of the rally faded pretty quickly though, and as the press conference got underway we moved to weakness instead.
The line which really moved markets was about 3 minutes into the presser, “we did not explicitly discuss a rate hike but discussed circumstances if interest rates need to go higher at some point next year”.
This saw 3y futures reach as low as 95.805, a -12.5bp selloff on the day and testing fresh lows back to November 2024.
Feb-26 RBA is now around 8bp (or 1/3 chance) priced for a hike, up from 4.5bp pre-meeting, and the rest of the RBA curve has shifted up 8-10bp leaving 48bp priced by the end of the year.
Corporate news in Australia
-Bapcor ((BAP)) issued a profit warning post its AGM guidance in October, the stock fell another -20%.
-UniSuper raises its stake in Qube Holdings ((QUB)) to 9.95% making it a potential deal maker in Macquarie Group’s ((MQG)) $9.92bn buyout.
-Pacific Equity Partners is considering merging Opal and Estia to form a major healthcare operator with potential to list on ASX.
-KKR is pondering the sale or privatisation of Pepper Money ((PPM)).
-AEMO has extended its forecast for the end of coal power in eastern states by 11 years and cuts the amount of new transmission lines it expects by 2050.
-BHP Group ((BHP)) has struck a US$2bn deal for BlackRock to take a stake in its WA power network as the mining giant seeks to monetise its infrastructure assets.
-Stonepeak, a major global infrastructure investor, is assessing listing more debt post the robust demand for the Stonepeak-Plus Infra Debt note which raised $300m.
On the calendar today:
-CH Nov CPI, PPI
-US 3Q Employment Cost
-US Fed FOMC Decision
FNArena’s four-weekly calendar: https://fnarena.com/index.php/financial-news/calendar/
| Spot Metals,Minerals & Energy Futures | |||
| Gold (oz) | 4238.80 | + 17.05 | 0.40% |
| Silver (oz) | 61.23 | + 2.75 | 4.70% |
| Copper (lb) | 5.33 | – 0.09 | – 1.72% |
| Aluminium (lb) | 1.30 | – 0.01 | – 1.11% |
| Nickel (lb) | 6.67 | – 0.01 | – 0.10% |
| Zinc (lb) | 1.40 | – 0.01 | – 0.90% |
| West Texas Crude | 58.40 | – 0.41 | – 0.70% |
| Brent Crude | 62.09 | – 0.36 | – 0.58% |
| Iron Ore (t) | 106.29 | – 0.13 | – 0.12% |
The Australian share market over the past thirty days…
| Index | 09 Dec 2025 | Week To Date | Month To Date (Dec) | Quarter To Date (Oct-Dec) | Year To Date (2025) |
|---|---|---|---|---|---|
| S&P ASX 200 (ex-div) | 8585.90 | -0.56% | -0.33% | -2.97% | 5.23% |
| BROKER RECOMMENDATION CHANGES PAST THREE TRADING DAYS | |||
| BEN | Bendigo & Adelaide Bank | Upgrade to Neutral from Sell | Citi |
| Upgrade to Accumulate from Hold | Ord Minnett | ||
| IGO | IGO Ltd | Upgrade to Neutral from Sell | UBS |
| IMD | Imdex | Upgrade to Outperform from Neutral | Macquarie |
| LTR | Liontown | Upgrade to Buy from Sell | UBS |
| MIN | Mineral Resources | Upgrade to Neutral from Underperform | Macquarie |
| Upgrade to Buy from Neutral | UBS | ||
| MVF | Monash IVF | Downgrade to Neutral from Outperform | Macquarie |
| NEM | Newmont Corp | Upgrade to Outperform from Neutral | Macquarie |
| NSR | National Storage REIT | Upgrade to Equal-weight from Underweight | Morgan Stanley |
| OBM | Ora Banda Mining | Upgrade to Outperform from Neutral | Macquarie |
| PLS | PLS Group | Upgrade to Neutral from Sell | UBS |
| RSG | Resolute Mining | Upgrade to Outperform from Neutral | Macquarie |
| S32 | South32 | Upgrade to Outperform from Neutral | Macquarie |
| STP | Step One Clothing | Downgrade to Hold from Buy | Bell Potter |
| Downgrade to Hold from Speculative Buy | Morgans | ||
| WAF | West African Resources | Upgrade to Neutral from Underperform | Macquarie |
| WHC | Whitehaven Coal | Upgrade to Outperform from Neutral | Macquarie |
| WTC | WiseTech Global | 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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CHARTS
For more info SHARE ANALYSIS: BAP - BAPCOR LIMITED
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For more info SHARE ANALYSIS: MQG - MACQUARIE GROUP LIMITED
For more info SHARE ANALYSIS: PPM - PEPPER MONEY LIMITED
For more info SHARE ANALYSIS: QUB - QUBE HOLDINGS LIMITED