The Monday Report – 20 April 2026

Array
(
    [0] => Array
        (
            [0] => ((NAB))
            [1] => ((NXT))
            [2] => ((VUL))
            [3] => ((IFL))
            [4] => ((AMP))
            [5] => ((IAG))
            [6] => ((RHC))
            [7] => ((SMR))
            [8] => ((DXS))
            [9] => ((MVF))
            [10] => ((TAH))
            [11] => ((BPP))
            [12] => ((SOL))
            [13] => ((VEA))
            [14] => ((YAL))
        )

    [1] => Array
        (
            [0] => NAB
            [1] => NXT
            [2] => VUL
            [3] => IFL
            [4] => AMP
            [5] => IAG
            [6] => RHC
            [7] => SMR
            [8] => DXS
            [9] => MVF
            [10] => TAH
            [11] => BPP
            [12] => SOL
            [13] => VEA
            [14] => YAL
        )

)

This story features NEXTDC LIMITED, and other companies.
For more info SHARE ANALYSIS: NXT
The company is included in ASX100, ASX200, ASX300, ALL-ORDS and ALL-TECH

US markets ended last week at new highs for the S&P500 and Nasdaq, but weekend developments between the US and Iran have US Dow futures down and WTI May futures up.

ASX200 futures are pointing to a robust start, but the ongoing Middle East conflict may dull upbeat indications.

Good Morning,

The ASX200 finished down -13 points, or -0.15%, last week at 8946.9, snapping a three-week winning streak. After a bumper rally during the first half of April, which saw the index temporarily reclaim the psychologically important 9000 level, profit-taking quickly set in.

This pullback came as a barrage of headwinds hit the local market. Investors had to digest woeful Australian business and consumer confidence data, as well as a fire at one of Australia’s last two refineries that amplified domestic fuel security fears.

Adding to the weight, Westpac issued a warning that interest-rate volatility tied to the Iran conflict had hit its markets income and prompted higher credit provisions.

Offshore, China marked its 33rd consecutive month of falling home prices.

Domestically, a solid labour force report simply reinforced the high probability of another RBA rate hike in just over two weeks.

The Australian rates market starts the week pricing in around 18 basis points of tightening for the May Board meeting. There is a cumulative 50 basis points of RBA hikes priced in for 2026.

Tony Sycamore, IG extract

Today’s Big Picture, J.L. Bernstein extract (post close US Markets on Friday)

Hormuz Opens But The Fine Print Matters

Iran declared the strait open for commercial traffic, tied to the Israel-Lebanon ceasefire that expires Tuesday.

Ships must use Iran’s designated route, hostile-nation cargoes are still blocked, and the US naval blockade on Iranian ports stays in force.

Oil had its worst week since April 2020 on the news. Stocks priced this like the war ended.

It didn’t.

It paused for four days with conditions attached.

Waller Pulls The Rate Cut Rug

The Fed’s loudest dove said prolonged Hormuz disruption could kill cuts entirely.

Daly backed him on wait-and-see. Stocks are at records betting on cuts that the doves themselves are now questioning.

Warsh walks into Tuesday’s confirmation hearing with a harder room than he planned for.

Quants Did The Heavy Lifting

Goldman flagged CTAs bought US$86bn in global equities over five sessions, near a record.

Trend followers flipped from short to long, and the algos chased the tape.

This rally is mechanical, not conviction.

History says a brief pause, then higher three months out.

The question is what happens when the flow runs dry.

NAB Markets Today Research extract

Markets finished the week on a positive note in the US and Europe, reacting to news the Strait of Hormuz had re-opened to commercial traffic.

Investors were keen to position for fading downside risks to global growth, a decent earnings season in the US, and growing expectations of Fed easing before year end.

The S&P500 posted a new record high, gaining 1.2% in the session. The benchmark US index has now rallied 12.4% since troughing in late March.

European equities outperformed on Friday, with the EuroStoxx50 up 2.1%, the German Dax up 2.3%, and the CAC 50 up 2%.

However, the encouraging headlines were short-lived, with Iranian officials announcing they had once again closed the key shipping channel over the weekend.

Iran’s Parliamentary Speaker noted a continued US naval blockade was the reason behind renewed restrictions on transit through the Hormuz.

According to the Wall Street Journal, the US military is preparing to board Iran-linked oil tankers and seize commercial ships in international waters to pressure Iran into reopening the waterway.

Adding to worries over the weekend, media reported some vessels in the Strait had been fired upon and there were signs the Lebanon-Israel ceasefire was fraying.

Bitcoin fell -2.5% over the weekend to US$75,550, reflecting rising tensions between the US and Iran.

For markets, the weekend’s developments highlight the path to the end of hostilities and a sustained ceasefire in the Middle East may not be straightforward.

The Iran-US two-week ceasefire is set to expire later this week on 22nd April, so markets will be watching eagerly for signs of an extension.

Late last night, there were reports the US was sending a delegation to Pakistan for a second round of negotiations. It is not clear whether Iranian officials will attend, given their displeasure with the US naval blockade.

Early price action to start the week has a risk-off tone, with AUD and NZD moving a little lower against the USD.

Brent futures fell as low as US$86/bbl on Friday evening, before rallying back towards the low 90s late in the session. 

Post weekend developments, WTI May futures are indicated up 8% and US Dow futures down -440 points.

In sovereign bond markets, the final trading session of the week produced a decent rally. 

Pricing for a May hike from the RBA edged higher on Friday night (19bps priced).

Participating in panel discussions in Washington DC, a couple of RBA officials delivered comments which appeared to have a hawkish lean. 

There was limited economic data overnight. The Euro area reported current account data for February. In the latest three months, the region’s overall surplus rose to be about 2.1% of GDP.

Looking ahead, key data for the coming week includes the March retail sales report in the US, flash April PMIs in the US, UK, and Europe, and March inflation data in both Japan and Canada, and Q1 inflation data in NZ.

In FX markets, the dollar declined on Friday, marking its ninth loss in ten trading days, according to Bloomberg.

In credit markets, US credit markets experienced a risk-on rally on Friday following geopolitical developments in the Middle East.

Michael Hartnett’s Bull Trap Thesis, Stephen Innes, SPI Asset Management extract

Last week, we tipped the hat to Michael Hartnett for catching the turn almost to the day, a clean signal as Bank of America pulled down its Sell flag right into the late March lows.

The kind of timing that doesn’t whisper, it rings a bell across the tape.

What followed was not a rally, it was a vertical repricing. Eleven days from washed out to overbought, the second fastest snap back since 1982. The only time the market moved this quickly from despair to euphoria was when Paul Volcker slashed rates from 13%, a policy shock that rewired risk appetite overnight.

So, the question into the latest Flow Show was simple, does Hartnett take a bow. Instead, he dims the lights. With the Nasdaq Composite ripping through a near-record 13-day winning streak, the longest since 2009, tech via Technology Select Sector SPDR Fund pushing fresh highs while financials through Financial Select Sector SPDR Fund can’t clear their 200-day, the move starts to look less like a breakout and more like a carefully dressed bull trap.

And yet the animal spirits are unmistakable. The Australian dollar ripping higher against the Japanese yen to levels not seen since 1990 is the market leaning hard into carry, into cyclicality, into risk. It is the kind of positioning that feels right, right up until it doesn’t. This whole move has to be one of the biggest head-scratchers in memory.

More amusingly, Hartnett turns the lens on his own survey and basically shrugs. The April Bank of America Global Fund Manager Survey prints as the most bearish since June last year, yet the tape tells a completely different story, with 2026 tracking toward record inflows into equities and IG credit.

It is the classic survey-versus-wallet disconnect. Managers talk defensively, allocate aggressively. Even Hartnett is now leaning into the trader’s rulebook, watch the flow, not the forecast. Slightly awkward when you are the one asking the questions.

And the flows last week read like a full risk reallocation rather than a cautious nibble. US$11.3bn into equities, US$7.9bn into bonds, with US$1.2bn each into gold and crypto, all funded by a historic US$172.2bn exodus from cash.

That is not rotation, that is deployment. The kind of move where cash stops being a position and becomes fuel, and once it starts burning, it tends to run hotter than expected.

How is the street reading the vertical bull run charge? The split is stark. On one side, the bears are holding the line. According to Bank of America, the macro crowd insists you do not chase risk until inflation has clearly peaked, and right now that peak is nowhere in sight.

If anything, Q2 looks like a reheating phase, with oil firming, CPI pushing higher, and yields following, a mix that has a habit of ending in another bond tantrum, echoing the playbooks of 2013, 2015, 2022, and 2023.

…driven by a cocktail the market rarely digests cleanly, a labour market that refuses to cool, a geopolitically pressured dollar losing some of its defensive bid, and growing expectations that Kevin Warsh would lean dovish early.

History adds a twist here, in the first three months of the last seven Fed chair transitions, yields have risen by roughly 50 basis points on average, a reminder that policy pivots do not always land the way markets expect.

On the other side, the bulls are keeping it simple. As long as yields and unemployment stay anchored in that 4 to 5% zone, the system holds, and risk can keep grinding higher. With earnings for the S&P500 tracking north of US$330, they see the rally not as excess, but as earnings catching up to price.

Just as importantly, the hierarchy has not changed. In this cycle, equities still sit above bonds. Policymakers are leaning into strong nominal growth to keep the electorate steady, and both the QE generation and Gen Z have been conditioned to treat the stock market as something that will always be backstopped, something simply too embedded to be allowed to fail.

So, where does Hartnett land?

Strip away the dry humour in his Zeitgeist line about regulators potentially easing day trading rules, and the message is clear. The system is still being nudged toward risk, one last extension powered by retail participation if needed.

And as the Bank of America strategist closes out his note, he lays down a roadmap that speaks less to celebration and more to what comes next.

-Both CPI & EPS expectations will peak in Q2
-2-year Treasury yield won’t break 4%
-2s30s UST yield curve bull steepens to over 140bps
-US$ DXY index hits new lows below 96
-China Shanghai index makes run to 4.5k
-Consumer discretionary beats energy in Q2

How is the BofA Investment strategist trading it?

-Lean into curve steepeners. The system cannot absorb higher oil for long when consumers are already stretched on affordability and increasingly uneasy about AI eating into job security. That tension feeds straight into the policy outlook, where the macro leans toward cuts, not hikes, with US small business capex intentions sliding back toward post-crisis lows

It lines up with my own read. Rate expectations have already swung from pricing -125bps of cuts to flirting with hikes and back again, now sitting around a token -5bps easing. That arc still feels too high. The path of least resistance is for those expectations to grind lower as the cycle matures and growth anxiety starts to outweigh inflation fear.

The Signals I’m reading and liking!

This war will pass, they always do, but the bigger trade is already forming underneath. The dollar never really rallied the way it should have during the crisis, and the case for fading it is building.

Tariffs, NATO friction, and the slow unwind of petrodollar recycling are all chipping away at structural demand. Foreigners are already sitting on massive exposure to US assets, and the appetite to keep adding into a US$39 trillion debt pile with a US$1.2 trillion annual servicing cost is starting to thin.

At the same time, policy pressure is shifting. The Fed is being nudged toward easing, not tightening, and that creates a simple choice for policymakers, allow yields to spike and risk breaking things, or let the currency absorb the adjustment.

History tells you which path they prefer. In that world, the dollar does not collapse, it leaks lower, and that is where the opportunity sits.

So yes, this conflict will end, but when it does, the cleaner trade is likely not chasing relief rallies in risk, it is leaning into dollar shorts as the macro tide quietly turns.

Lean into commodities. The pecking order is shifting, commodities first, then equities, with bonds trailing behind in a world where inflation risk refuses to fully die. For allocators, commodities are doing triple duty, they hedge risk, they hedge inflation, and they hedge a weakening US dollar all at once.

And the geopolitical layer only reinforces it. This is no longer just about pricing cycles, it is about control. The race now is over who owns the inputs, energy, metals, rare earths, the raw materials that power the next phase of growth.

In that world, commodities are not just an allocation, they are leverage on the new global order, or as Hartnett put it, “who owns the chips, rare earths, minerals, oil, wins the AI war”.

Lean into China. The early winners of the AI race have been clear, US semis, Asia tech, and the resource corridors feeding them, but the catch-up trade is now kicking in. China tech has started to move with intent, and the ChiNext Index breaking out is the market signalling that this leg is no longer lagging, it is joining the run.

This used to be one of my cleaner tells for stepping into yen longs when the stretch got too extreme. With the Chinese yuan pushing to multi-decade highs against the Japanese yen, and similarly extended versus the South Korean won, the setup starts to look crowded.

China has the energy tailwind, alternative energy and cheap Russian oil, to keep its machine running, but such dislocations rarely last forever.

The key is timing the turn. When the war premium fades, and the macro shifts back toward rates and growth, that stretched relationship has a habit of snapping back, and that is where the yen trade comes back into play. Not for now, but one to keep in the pocket when the regime flips.

This one was not on my radar, but it is worth flagging. The US consumer discretionary complex is sitting at relative levels last seen during the Lehman Brothers collapse and the covid-19 market crash, while globally the sector is trading at multi-year lows versus energy.

That tells you the consumer has already priced in a heavy dose of stagflation, arguably more than any other part of the market.

That is why Hartnett leans into it as a contrarian long. If the post-war pivot shifts toward affordability and political pressure forces support back toward households, this is where the rebound lives.

It is also a clean hedge on a broader shift in the policy regime, where the pendulum starts swinging away from market-first thinking toward something more redistributive as the decade rolls on, or, as Hartnett framed it, from “populist capitalism” to “populist socialism”.

Corporate news in Australia

-National Australia Bank ((NAB)) flags -$706m credit impairment

-NextDC ((NXT)) upgrades utlisation outlook and FY26 capex to -$300m, shares placed in a trading halt ahead of equity raising

-Vulcan Energy ((VUL)) announced Germany’s Rhineland-Palatinate state has granted a five-year royalty exemption for lithium production through to December 31, 2030

-Axight acquires minority stake in La Trobe Financial, implying a $3bn valuation

-Anchorage Capital to acquire HMA International for $170m

-CC Capital’s move on Insignia ((IFL)) sparks speculation of a potential future AMP ((AMP)) takeover

-ACCC escalates review of Insurance Australia Group’s ((IAG)) $1.4bn RAC Insurance bid to Phase 2

-Ramsay Health Care ((RHC)) considering divestment of UK arm to refocus on Australia and New Zealand assets

-Stanmore Resources ((SMR)) may require a large equity raising to fund potential acquisition of Anglo American’s Queensland assets

-Dexus ((DXS)) acknowledges document confidentiality but disputes claims around forced Melbourne Airport share sale

-Monash IVF ((MVF)) under pressure ahead of $350m private equity bid deadline

-Future Fund spent $300k probing allegations against senior executives

-Tabcorp Holdings ((TAH)) secures approval for live betting devices in Victorian venues

-Babylon Pump & power ((BPP)) is being recapitalised via an equity issue

On the calendar today:

-NZ March Trade Bal

-JP March Trade Bal

-WASHINGTON H. SOUL PATTINSON AND COMPANY LIMITED ((SOL)) ex-div 48.00c (100%)

-VIVA ENERGY GROUP LIMITED ((VEA)) Qtrly Update

-YANCOAL AUSTRALIA LIMITED ((YAL)) Qtrly update

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

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)

All paying members at FNArena are being reminded they can set an email alert specifically for The Overnight Report. Go to Portfolio and Alerts on the website and tick the box in front of The Overnight Report. You will receive an email alert every time a new Overnight Report has been published on the website.

Find out why FNArena subscribers like the service so much: “Your Feedback (Thank You)” – Warning this story contains unashamedly positive feedback on the service provided. www.fnarena.com

FNArena is proud about its track record and past achievements: Ten Years On

Click to view our Glossary of Financial Terms