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Markets Live: Rally runs out of puff


The sharemarket has closed at the day's lows, led down by falls in the big banks as investors took profits.

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That's all from us here at blog central - enjoy your evenings.

We hope to see you again tomorrow from 9.30am.

Click here for a full markets wrap.

And another tweet on tomorrow's RBA meeting and calls that the board is likely to sit on the fence:

Tomorrow the local earnings season starts. Here's what you need to know about what happened today and what's expected tomorrow:


  • ASX200 ends down 0.3%, at day's lows
  • AUD slightly higher; buying $US1.0435, 96.7 yen, 76.6 euro cents
  • The Nikkei is up 0.7%; Shanghai flat and Hang Seng up 0.4%
  • Wall St futures are flat; FTSE futures up 0.1%
  • Gold is 0.2% higher, WTI crude oil 0.2% lower


  • US factory orders December: 2.4% rise expected
  • Eurozone PPI December: -0.2% m/m and 2.1% y/y


  • RBA board meeting - no change expected
  • ABS house prices for December quarter
  • ABS international trade in goods and services


  • Challenger Diversified (HY) -- Expected: $22.2 million net profit/8.7c dividend
  • Cochlear (HY) -- Exp: $80 million / $1.25
  • Navitas (HY) -- Exp: $35.5 million / 9.4c
  • Reckon (FY) -- Exp: $18.4 million / 4.8c
  • Transurban (HY) -- Exp: $213 million / 15.5c

(HY is half year; FY is full year. Earnings estimates are courtesy of Goldman Sachs.)

Global giants including Apple and Google will be forced to reveal how much tax they pay the federal government, under a plan to name and shame firms seen to be dodging their responsibilities by using tax havens.

The proposed crackdown would also clear the way for the government to publish more detail on how much mining tax resources firms are paying. Until now, the government has refused to say exactly how much money the mining tax has raised, citing the need for taxpayer confidentiality.

A fundamental principle of tax law is that the affairs of all taxpayers, from individuals to corporate giants, are kept secret.

But with governments around the world seeking to protect their budgets against use of tax havens, especially by technology firms, large companies operating in Australia may no longer enjoy such privacy.

Sales of locally made family sedans are at their lowest in memory as buyers flock to imported SUVs and utes.

Preliminary sales figures for January obtained by Drive show Holden sold roughly 1600 Commodores for the month, believed to be its worst month on record. It was a record low for its traditional rival too, with Ford selling less than 800 examples of the Falcon.

Toyota’s locally made sedans, the Camry and Aurion, also registered what is believed to be their worst monthly sales on record.

January is typically a bad month for the locally-built sedans because fleet buyers, who account for up to 70 per cent of their sales, don’t buy cars in January.

But the results put further pressure on an industry that has been criticised for relying too heavily on government subsidies for its survival.

Here's the whole yarn

Most sectors posted losses, with financials down 0.5 per cent, gold falling 1.1 per cent and energy slipping 0.1 per cent. Materials ended flat while telcos inched up 0.2 per cent.

The sharemarket has closed at the day's lows. The benchmark S&P/ASX200 fell 13.6 points, or 0.3 per cent, at 4907.5, while the broader All Ords lost 12.8 points, or 0.3 per cent, to 4929.1.

The Australian dollar has shot up to fresh four-year peaks on the yen and held ground against its US counterpart, while bond prices fell to their lowest since May as major support levels finally gave way.

The Aussie is trading at 96.63 after earlier flying to 96.78 yen, its strongest levels since August 2008. It's also buying $US1.0425, from $US1.0404 early, and 76.5 euro cents, up from 76.22 earlier.

The Aussie is underpinned by stronger Asian bourses and rising commodity prices after solid manufacturing data from the United States, Europe and China late last week.

"While the AUD is strong and will continue to weigh on domestic demand indicators ... global factors suggest AUD should remain buoyant," summarises Greg Gibbs, a strategist at Royal Bank of Scotland in Singapore.

This explained why the Australian dollar has been resilient to a run of surprisingly weak data including a fall of 4.4 per cent in building approvals and a continued drop in job ads.

Gold has ticked up but is unable to breach the upside limit of a recent trading range as mostly upbeat US data takes some shine off the precious metal, which withers when economic recovery gains traction.

"Investors remain fairly optimistic in the US recovery, which makes gold less attractive, even though recent data is rather a mixed bag," says Chen Min, an analyst at Jinrui Futures in Shenzhen. "Unless we see surprisingly good news for gold, it will be trapped in a narrow range of roughly $US1660 and $US1680 an ounce."

Spot gold is up 0.3 per cent to $US1671.60 an ounce.

After a decent start today, the Australian sharemarket appeared to take the foot off the gas with some key sectors of the market unable to sustain the upward momentum, CMC Markets trader Tim Waterer says:

The bumper lead from Wall Street made for a day of green numbers across most of the Asian region, however the underperformance of the ASX200 today is perhaps due to what can be viewed as a pre-emptive move higher by the Australian bourse last Friday (where the index added 42 points).

A key indicator that will be released two days after the Reserve Bank's meeting, the unemployment rate, is forecast by economists to drift slightly upwards to 5.5 per cent from 5.4 per cent the month before.

"I think the private sector is still indicating by its activity in the labour market that there’s still not moves to significant reduce the work force, otherwise we would see a lot more negatives on the monthly employment figures," Commonwealth Bank senior economist Michael Workman said.

"On balance, the case is [the RBA] can sit, wait and watch. And maybe they can progress this argument that in December the rate cut was provided on a reading of the economy both here and offshore that was a little bit more negative than it’s actually turned out to be."

In Japan, Panasonic shares jumped 16.89 per cent to 692 yen in Tokyo morning trade, following the company’s announcement after the close of Friday’s session that it posted an operating profit of 121.95 billion yen ($1.27 billion) in the nine months to December, and a 61.4 billion yen net profit in the last three months of 2012.

That marked a huge reversal from a net loss of 197.6 billion yen a year earlier, with Panasonic citing aggressive cost-cutting as part of a massive corporate overhaul aimed at stemming record losses.

Rio Tinto’s $3 billion expansion of a Pilbara mine has been approved by the West Australian government.

More than 1,500 construction jobs would be created, nearly tripling iron ore operations at the Nammuldi mine and building a new 130 megawatt power station at nearby Cape Lambert, from where the ore will be shipped.

There would be ongoing employment for more than 700 people, WA Premier Colin Barnett said in a statement.

The expansion would see iron ore mined below the water table and production increased from eight to 23 million tonnes a year.

Rio shares are up 1 per cent to $67.86.

Puma Energy has agreed to buy independent fuel distributor and retailer Ausfuel from private equity firm Archer Capital, in a deal reported to be worth up to $650 million.

In a statement, Puma Energy, which is a subsidiary of Dutch independent commodity trader Trafigura Beheer, said the deal would make it Australia's largest independent fuel retailer.

Terms were not disclosed. Morgan Stanley advised Archer, one of Australia's largest buyout firms.

The Australian Financial Review reports that the deal is worth between $625 million and $650 million.

The new head of Australia's solar thermal research effort says the cost of generating electricity can be halved by 2020, placing it on course to match the renewable energy contribution from solar photovoltaic technologies.

Manuel Blanco, an international specialist in solar energy, started today as director of the CSIRO-led Australian Solar Thermal Research Initiative (ASTRI). The initiative has $87 million in funding over eight years to advance so-called concentrating solar power technologies, which typically tap solar energy using mirrors or lenses to drive steam turbines.

Dr Blanco said a "technological leap" would be needed to cut generation costs from 25 cents a kilowatt-hour to 12 cents by 2020 but collaborative efforts between Australian and overseas scientists could achieve the goal. Costs had fallen by about 25 per cent over the past five years.

Have you noticed that international flights have become more crowded lately? Former Qantas chief economist Tony Webber has.

The airline metric that describes the extent of this crowding is the seat factor, defined as the percentage of seats on the plane that are occupied. For all international flights operated into and out of Australia, the seat factor has grown from just 66 per cent in 1991 to 77 per cent in 2012.

Click here for the full story.

Here's a snapshot of how markets around the region are performing:

  • Nikkei(Japan): +0.5%
  • Shanghai: +0.6%
  • Taiwan: +0.7%
  • South Korea: flat
  • Singapore: +0.6%
  • New Zealand: flat

Buyout firm Quadrant Private Equity is actively considering an initial public offering of its Virtus Health in vitro fertilisation business, the largest IVF group in the Asia-Pacific region.

A share sale, which could be worth around $500 million according to press reports, is possible around mid-year, Quadrant director Marcus Darville says.

"Virtus is the largest player in its sector and it is a natural IPO candidate," Darville says. "There is a lot of investor interest in healthcare stocks, and the market background is becoming more positive again."

Whilst the market is up, interest rates are down. That's the simple explanation for why stocks might yet rise further, Steven Johnson says in Don't sell your stocks just yet:

The longer explanation is that the earnings yield of the market, which is the earnings before tax for the ASX 300 divided by the combined market capitalisation of the ASX 300 companies, hasn't fallen any more than the 10-year Australian Government bond yield.

Whilst a rising market has caused the earnings yield to fall from around 11% at its peak to just over 8% now, the yield on 10-year government bonds has fallen from 6% to 3.5% over a similar period.

The gap between the two is known as the equity risk premium—the extra return you receive for investing in stocks rather than bonds. And as the chart show, the equity risk premium is still at historical highs.

Despite the fact that stocks prices went up last year, with current interest rates you can expect to earn a return of about 5% over that of bonds.

Lawyers for the former head of surfwear company Billabong have until the end of the month to review the prosecution case against him.

Matthew Perrin, 40, has pleaded not guilty to a charge of defrauding the Commonwealth Bank of $13.5 million.

It’s alleged Perrin forged his former wife Nicole Bricknell’s signature on documents, enabling him to use the value of a jointly-owned house on the Gold Coast to obtain a loan of $13.5 million from the bank in 2008.

Perrin, once regularly listed as one of Australia’s richest men, filed for bankruptcy in March 2009. He had debts of $28.2 million.

Despite the recent strong gains in the sharemarket, the rally still has a bit to go, writes Intelligent Investor's Steven Johnson:

The professionals are certainly a lot more optimistic. Of the fund managers surveyed by Bank of America Merrill Lynch, 80 per cent are taking on “more risk than usual”.

Mums and dads are slowly dipping their toes back into the market, too. And since hitting its lowest absolute level since 2003 in the September 2012 quarter, margin lending is once again increasing.

With the ASX All Ordinaries Index up nearly 19 per cent in 2012, hopefully you had a good year.

The one big question that many investors are now grappling with is this: with the market rallying so hard, is it time to take some money off the table?

Here are some of his answers

It's heavily against the odds but there are still some tipping a rate cut tomorrow:

CBA economist Michael Workman said although today's building approval numbers were disappointing, the housing sector is still expecting a boost in 2013.

  • The 4.4 per cent fall was composed by a 3.3 per cent fall in detached dwellings and a 5.4 per cent fall in the volatile multi‑unit dwellings segment. It does, however, keep the three month average at the 13k run rate required to achieve a 10 per cent rise in approvals over 2013. 
  • Underlying economic drivers of housing activity are generally quite supportive of a rise in dwelling approvals.  We expect that lower mortgage rates, a stabilisation in house prices, improved housing affordability and pent‑up demand for dwellings will boost activity in the housing market over 2013.  In our view, it looks likely that national residential approvals will be about 160k for 2013, up 10 per cent from 2012’s estimated outcome of 145k. 
  • The major missing ingredient to the economic drivers is higher consumer confidence. While consumers say that it is a good time to buy or build a dwelling, they are, at this stage, hesitant to commit to higher debt levels. First Home Buyers grants’ have been skewed towards new construction but, so far, they have not been as keenly sought as in previous cycles.

As we head into the second half of the trading day, he's a look at the best and worst performers of the top 50 companies on the ASX:

Among the sectors, it looks as though the miners are the ones holding the ASX in the black:

  • Materials: +0.5%
  • Telecommunications: +0.7%
  • Financials: -0.2%
  • Consumer discretionary: -0.1%
  • Gold: -0.3%

A measure of online sales has pulled back from record highs in December as the seasonal rush of Christmas shopping peaked, though the pace of sales growth remained far above that for bricks and mortar stores.

National Australia Bank's index of online sales dipped 5.8 per cent in December to 227 points, unwinding part of November's 15 per cent spike. Annual growth in the index cooled a little to 22.8 per cent, from 26.5 per cent in November.

NAB said the move was largely seasonal, with November being the peak month for online sales which allows time for goods to be delivered ahead of Christmas.

Here's how the region's sharemarkets are doing today (Shanghai not open yet but expected to rise):

  • Japan (Nikkei): +0.3%
  • Hong Kong: +0.6%
  • Taiwan: +0.55%
  • Korea: +0.2%
  • Singapore: +0.5%
  • New Zealand: +0.15%

‘‘Economic news was universally good,’’ says Matthew Sherwood, head of investment markets research at Perpetual Investment, referring to Friday's US jobs data and a reading on China's services sector.

‘‘Corporate leaders are becoming more confident about the growth outlook. Investors are starting to feel the same way, even though questions remain about the strength of corporate earnings growth.’’

The dollar is trading at $US1.0423, about where it was before the weak building approvals data put some pressure on the currency.

The Aussie is also buying 96.5 yen, extending its remarkable rally against the Japanese currency, while against the euro it's headed in the oppositen direction, slipping to 76.45 euro cents.

Qantas will consider increasing flights to destinations such as Beijing and Delhi from 2016 using longer-range Dreamliner planes as part of an overhaul of its Asian network.

Ahead of the launch of its proposed alliance with Emirates, Qantas has provided more details of its plans for the region, including a re-timing of flights to ensure they better connect with other services.

As part of the rejig of its international network, Qantas will cease flying to Frankfurt six months earlier than planned. The airline's final flight to the German city will now be on April 15.

Qantas will also stop flying between Adelaide and Singapore on April 14, and between Perth and Hong Kong on March 31. It will reduce Perth-Singapore services from two to one a day.

Here are all the details

The number of Qantas flights to Asian destinations will remain the same but the totoal number of seats will increase.

The number of Qantas flights to Asian destinations will remain the same but the totoal number of seats will increase. Photo: Getty Images

The first drop in building approvals since last April means the Reserve Bank will be more likely to cut rates, JPMorgan economist Tom Kennedy says:

  • (The drop) is quite worrying because detached dwellings really give you the underlying sense of what’s happening in the housing market.
  • When you look at the number of building approvals in level terms, they are significantly lower than they were in 2010 and 2009 and if you want to see those levels return I think the RBA is going to have to provide a bit more of an accommodative stance over the coming months.
  • But an improving outlook for the global economy, including stronger growth in China, mean the RBA will keep the cash rate on hold at its February board meeting tomorrow.

Aquila Resources has put its $7.4 billion West Pilbara iron ore project on ice at least through June due to funding difficulties, sending its shares down nearly 10 per cent.

Aquila and its partners AMCI, a mining investment firm, and South Korean steel giant Posco, effectively froze the project last September, when iron ore prices hit a three-year low. They had failed to agree on a budget for the year to June 2013 and sent the dispute into arbitration.

Arbitration was due to begin on February 18, but Aquila said today it had bowed to its partners and would continue the suspension on the project for the rest of this financial year.

Shares in Aquila, 14 per cent owned by China's biggest listed steelmaker, Baoshan Iron & Steel Co, sank to a one-month low of $2.82 and last traded down 4.8 per cent at $2.97.

In other second-tier economic data out today, ANZ reported that monthly job advertisements fell by 0.9 per cent last month, posting an 11th straight month of declines.

Job ads had dropped a revised 2.8 per cent in December, after a 2.8 per cent decline in November.

ANZ's head of Australian economics and property research, Ivan Colhoun, says the January results meant job advertising was "broadly unchanged", given the seasonal swings during the December and January period.

"We will need to assess the February data to ascertain whether the previous decline in job advertising is beginning to moderate," Mr Colhoun says.

At the same time, building approvals data from the Bureau of Statistics, also released this morning, revealed that dwelling approvals dropped 4.4 per cent in December in seasonally adjusted terms, against economists’ expectations of a 1 per cent rise. In November, approvals went up by 3.4 per cent.

Private sector housing approvals fell 3.3 per cent in December in seasonally adjusted terms, the Bureau of Statistics said, as the value of total buildings approved sank 1.9 per cent for the same month.

A bit more on the Visa-ACCC story mentioned earlier.

The ACCC has sued Visa in federal court, claiming the company prevented the expansion of so-called dynamic currency conversion services. A copy of the claim wasn’t immediately available from the court.

Dynamic currency conversion services give customers the choice of completing a transaction in their home currency or in the local currency of the retail store or bank cash machine. A cardholder who chooses DCC receives a locked-in exchange rate that’s disclosed at the time of the transaction, the ACCC said.

“The ACCC is concerned that Visa sought to stop the growth of competing dynamic currency conversion services,” ACCC Chairman Rod Sims said in the statement. Visa earned less revenue when a cardholder selected DCC, the regulator said.

More to come.

The banks are generally pretty saggy in early trade:

  • CBA is 0.28% lower to $64.87
  • ANZ is 0.3% higher to $26.82
  • NAB is 0.07% lower to $27.98
  • Westpac is 0.25% lower to $28.23

What's in store for the week, courtesy of Michael Pascoe:

Looking at some of the blue chips now, we'll start with the big miners who are having a happy Monday:

  • BHP is 0.38% higher to $38.06
  • Rio is 1.18% higher to $67.99
  • Fortescue is 1.46% higher to $4.86
  • Newcrest is 0.8% higher at $23.81

Looking ahead to the data slated for release at 11.30am, the number of permits granted to build or renovate houses and apartments in Australia probably increased 1 per cent from November, when they rose 2.9 per cent, according to the median estimate of economists surveyed by Bloomberg News. We also get ANZ job ads at 11.30am.

Among other things, expectations of the building data could be helping to support the Aussie, says one analyst.

‘‘Stronger economic growth and leaving rates on hold would be positive for the Aussie,’’ said Hans Kunnen, the chief economist at St. George Bank in Sydney.

‘‘The Reserve Bank will continue to wait and see the impact of earlier cuts. There just doesn’t seem to be the same level of anxiety there was last year.’’

A bit more on the question of data, inflation, and the possible future direction of interest rates:

A good question from reader 'Retd1':

10.15 - did everyone sell so they could watch the Superbowl??

The chances of a rate cut at tomorrow’s RBA meeting are sinking, according to Credit Suisse data. Here are the market implied rates for a 25 basis point cut tomorrow:

  • Today: 16% chance of a 25bp rate cut
  • Friday: 22% chance of a 25bp rate cut

On the question of Aussie markets topping 5000, here's Arab Bank's David Scutt:

Early gains have moderated. After rising 0.61 per cent in opening trade, the ASX200 has retreated to a gain of 0.2 per cent. The All Ords has followed a similar trajectory.

The first bit of data is out for today. Inflation remains at a slow enough pace for the Reserve Bank of Australia (RBA) to again cut the cash rate, but expectations are that it won’t this month.

The TD Securities/Melbourne Institute Monthly Inflation Gauge rose by 0.3 per cent in January for a 2.5 per cent annual pace, which was in the middle of the RBA’s two to three per cent target range. Underlying inflation, the RBA’s preferred measure, which excludes volatile price changes, was at 2.2 per cent for the 12 months to January.

Qantas plans to broaden the number of destinations it flies to in Asia as part of its new alliance with Emirates.

The Australian carrier’s outlined its new four-phase strategy for the Asian market. The new destinations being considered include Beijing, Seoul, Mumbai, Delhi and Tokyo-Handeda.

Qantas also plans to provide more frequent flights to Singapore and Hong Kong, as well as change the time of those flights and increase capacity on those routes. Qantas said the improvements to its Asian services would begin on March 31 and be rolled out in four phases.

Qantas shares are down 0.3 per cent in early trade to $US1.535.

S&P Capital IQ has released some interesting numbers ahead of the official launch of earnings season. In the February issue of their earnings report, they point out that 166 companies have reported earnings in FY12, with 37 per cent beating expectations. They also note:

  • Companies still remaining to report with the largest expected earnings growth for FY 2012 include Aurora Oil & Gas +81.0%, Caltex Australia +74.9%, and QBE Insurance +44.4%.
  • Companies still remaining to report with the most upward revisions for FY 2012 in the past month include, OZ Minerals 8 upward revisions, Alumina 8 upward revisions, and Iluka Resources 7 upward revisions.
  • Companies with the greatest potential upside based on Capital IQ consensus target price include, Maverick Drilling & Exploration +187.7%, Gryphon Minerals +164.3%, and Saracen Mineral Holdings +97.49% (*data as of 1/30/13).

In technical terms we are in a cyclical bull market now that the market has breached the 20 per cent level, Matthew Kidman writes:

The bears, though, will say it is just another sharp rally in a secular bear market that has been in train since the market topped on November 1, 2007.

So should you buy the sharemarket now that it has motored 23 per cent higher in six months or have you missed the whole thing and is it better to wait for a pull-back?

Read his view here

The S&P/ASX 200 is now up more than 23 per cent cince the surge ignited back in June 2012.

The S&P/ASX 200 is now up more than 23 per cent cince the surge ignited back in June 2012. Photo: Louie Douvis

Here are the worst-performed companies on the ASX200 in early trade:

  • Discovery Metals: -4.8%
  • Sirtex Medical: -1.62%
  • Navitas: -1.19%
  • IOOF: -1.18%
  • Acrux: -1.11%
  • Invocare: -0.94%
  • Crown: -0.85%

Here are the best-performed companies on the ASX200 in early trade:

  • Mirabela Nickel: +4.44%
  • Saracen Mining Holdings: +3.85%
  • Gindalbie Metals: +3.51%
  • AWE Ltd: +3.46%
  • Independence Group: +3.17%
  • Boart Longyear: +2.5%

Looking at the sectors on the ASX200 now:

  • Energy: +0.92%
  • Materials: +0.78%
  • Telecoms: +0.72%
  • Info tech: +0.55%
  • Consumer disc.: 0.55%
  • Financials: +0.34%

The Australian share market has opened more than half a per cent higher.

The benchmark S&P/ASX200 index was up 27.3 points, or 0.55 per cent, at 4948.4, while the broader All Ordinaries index was up 26.5 points, or 0.54 per cent, at 4968.4.

On the ASX 24, the March share price index futures contract was up 16 points at 4895, with 6752 contracts traded.

The ACCC is taking legal action against Visa in the Federal Court in NSW for misuse of market power.

BusinesDay's Lucy Battersby is about to read the legal documents and will file more details shortly.

Early take - shares off to a solid start. Up about 0.3 per cent in opening trade.

The Australian share market is expected to start the week in the black today after positive economic news from the US and China over the weekend, CommSec chief economist Craig James said.

Mr James said the Chinese services gauge, which was at 56.2, ‘‘had reached expansion territory’’. In the US, the ISM manufacturing gauge, consumer sentiment, construction, spending, employment were all higher and should be give a boost to the Australian market, he said, adding that oil, gold, base metals and iron ore prices were also all up.

The bright start to the week was also reflected in the rise of the Australian dollar this morning.

‘‘The Australian dollar finished US trade around $1.0405 and [at about 8am today] it was $1.0425, so it’s put on almost a quarter of a cent in our timezone this morning - that’s a pretty strong rise,’’ Mr James said.

But he added that investors were still expected to exercise some caution ahead of the start of the earnings season today and the Reserve Bank’s board meeting tomorrow.

The market would be watchful of retail sales data to be released on Wednesday, labour force data to be published on Thursday and the Reserve Bank’s monetary policy statement, which will be issued on Friday, he said.

Results from Telstra, News Corp, TabCorp and Transurban Group were expected to dominate the first week of earnings season, Mr James added.

On the RBA decision tomorrow, more commentators are starting to call the end of the rate cutting cycle. Here are a couple of well-known economists on that point:

The centrepiece of the week will be tomorrow's RBA decsion on interest rates. A Bloomberg survey expects the official cash rate to be kept on hold at 3 per cent, with only four of the 28 respondents forecasting a rate cut to 2.75 per cent. That's followed on Thursday with unemployment data for January.

Looking at the calendar, it's going to be a solid week on the newsfront. Here's a quick look at what we've got in store today and through to Friday:


  • TD Securities inflation for January - 10.30am
  • Australian Bureau of Statistics (ABS) building approvals for December - 11.30am
  • ANZ job ads for January - 11.30am
  • Dun and Bradstreet business expectations survey

This week:

  • Tuesday: Cochlear, Transurban report results, RBA rates meeting, AiG performance of services index for January, ABS house price index
  • Wednesday: Retail sales for December quarter, Primary Health Care results
  • Thursday: AiG performance of construction index for January, NAB business confidence for December quarter, official jobs data for January. Australand, Tabcorp, Telstra and News Corp results
  • Friday: RBA statement on monetary policy, Newcrest results

Australian bond futures have sold off following weakness in US Treasuries. Westpac senior market strategist Damien McColough said local bond futures prices opened lower on Monday after a selloff in US Treasuries on Friday.

Mr McColough said three-year futures prices had now fallen below their recent support level of 97.100, and were likely to continue to move lower.

‘‘I think you will find the technical levels have now broken and the target from here would be 97.000,’’ he said. Mr McColough said domestic events would drive the local market this week, including the Reserve Bank of Australia’s monthly interest rate decision on Tuesday, the release of retail trade figures for December on Wednesday and the release of employment figures for January on Thursday.

At 8.30 AEDT, the March 10-year bond futures contract was trading at 96.495 (implying a yield of 3.505 per cent), down from 96.500 (3.500 per cent) on Friday afternoon.

The March three-year bond futures contract was at 97.100 (2.900 per cent), down from 97.130 (2.870 per cent).

For a comprehensive look at this morning’s business news, check today’s need2know. Here are some key numbers and links for the morning:

  • The SPI futures index was 24 points higher to 4903
  • The $A was higher as $US1.0422
  • US shares closed at a 5-year high on good data
  • Iron ore gained 70 US cents to $US153.20
  • Australian finance calendar: February 4-8
  • Wall Street week ahead: Will the optimism continue?

A bit of housekeeping to get the week rolling. From tomorrow, we'll be launching the blog each day at around 8.30am to catch all of the earnings reports as they happen. Like we always have, we'll publish individual stories as each company updates the market, but we will also have a rapid response to each of the announcements published the blog with links to the full coverage.

So tune in to Markets Live from 8.30am each morning to get the latest company results.

Good morning folks. Welcome to the Markets Live blog for another.

Contributors: Thomas Hunter, Jens Meyer, Max Mason

This blog is not intended as investment advice

BusinessDay with agencies

Quotes Search

Sort comments by:
  • "Aquila Resources has put its $7.4 billion West Pilbara iron ore project on ice at least through June due to funding difficulties, sending its shares down nearly 10 per cent."

    There is a glut of iron ore. Spot price spike is due to speculation by traders.

    Date and time
    February 04, 2013, 2:47PM
  • Mates rates short time only !

    Date and time
    February 04, 2013, 2:20PM
  • Intelligent investor reckons market's got a way to go. With funds being driven from low yielding bonds to attractive yielding stocks such as Telstra, I kind of agree.

    Gordon Gekko
    Date and time
    February 04, 2013, 1:56PM
  • We're just like Spain!! I tell ya!
    We'll all be runed!!

    Coasta Del Palmer
    Date and time
    February 04, 2013, 1:47PM
  • Billabonk (BBG), up 1.15cents at my last viewing. What a funny number.

    Gordon Gekko
    Date and time
    February 04, 2013, 1:20PM
  • "Job advertisements in newspapers and on the internet dipped in January, extending a long run of losses that points to sluggish demand for labour."

    The pollyanna rally is not backed by earnings or any other indicator.

    Yikes! What will that do to house prices?

    Date and time
    February 04, 2013, 1:07PM
    • Probably the same as it has done over the previous 10 job ads down months - nothing! Because people realise how well our economy is doing despite the negative growth in the US and Europe. Ths rest of the western world would love our economic "problems"!!

      Life Is Good
      The Real World
      Date and time
      February 04, 2013, 2:04PM
    • That's nice except prices are falling.

      Date and time
      February 04, 2013, 2:13PM
  • Noticed that the APM monthly auctions figures are now posted at

    Remember this article talking about how the strong the auction results were for the last 8 weeks in Sydney?

    Had one of my staff knockup a spreadsheet looking at the weekly reporting by APM compare to the monthly results.

    His analysis showed that the weighted mean overstatement of weekly results by APM for Aug - Dec 2012 was 10.5%. In other words every week that was 60% was actually on 55.5%.

    ED: We asked APM about this. Here's Dr Andrew Wilson's response: "Comparing apples with oranges - weekly model and monthly model are different - but trend of each is the same."

    Date and time
    February 04, 2013, 12:39PM
    • How are they different? They are APM's own numbers and are calculated off the same set of results.

      Also Sydney Aug to Dec monthly results were:

      Aug 59%
      Sep 58%
      Oct 56%
      Nov 55%
      Dec 53%

      Hwow are these numbers indicative of an improving market and strong results?

      Date and time
      February 04, 2013, 2:37PM
  • Is Jonaze all tere? Has he not realised that the Stockmarkets of the US ( and the rest of the World) are being fuelled by ultra low interest rates and the QE policy settings. It's cash looking for a return. Australia, because the economy has been relatively well handled by Gillard Labor has maintained higher returns and it is only now that rates are dropping that people are turning to riskier assets.His comments are representative of too many Australians who whinge without thinking.
    I suggest he reads Ross Gittins in today's paper.

    Date and time
    February 04, 2013, 12:28PM
    • No Gillard/Swann stabbed a first term PM in the back at the behest of mining interests and effectively doubled down on mining at the expense of flatlining non-mining sectors of the economy.

      Now they are up against the coalition and half of their own party.

      Good luck.

      Date and time
      February 04, 2013, 12:54PM
    • Hey careful there Jismoff, sensible comments like yours have no place here.

      You're only going to inflame the trolls.

      Space Hippy
      Date and time
      February 04, 2013, 1:58PM
    • The latest newspoll numbers out today indicate that the Gillard government will be creamed.

      Date and time
      February 04, 2013, 2:38PM
    • @Jismoff

      Our economy has been held up by selling national and private assets and debt. It will now unravel at and exponential rate. How anyone can see such folly as good, I'll never comprehend.

      Check out the massive candle stick on the XAO.

      Date and time
      February 04, 2013, 3:31PM
  • Anyone have any market based comments rather than political, or am i in the wrong place for that.

    Date and time
    February 04, 2013, 11:59AM
    • Wrong place...

      When people finally wake up to the fact that it does not matter whether it's Labor/Liberal/Green, whoever you call them, "the gubbermint" have been, are, and probably always will rob us at every turn. One day maybe people will hold the government to account for it's actions. Until such time all hail the central planners, comrade.

      Bye Bye Fiat Money
      Date and time
      February 04, 2013, 3:43PM
  • Saw the Dow go over the 14000 points on the weekend and it brought back distant memories. 15/10/2009 Dow flew over 10000 points so up over 4000 points in just over 3 years and the Magnificent ASX up from 4859 to a marvellous 4926.
    A piddling 67 points in over three years.
    Congrats to those who have only been in the market 6 months but thats a very few.
    Labor and Julia in particular must be very proud on all the wealth they haven't given Australians over the past three and a half years. Can't wait until 14/10/2013. PS What happened at 10.10am?

    Date and time
    February 04, 2013, 11:49AM
    • And many now calling a Top in the DOW, and other world markets.

      I knew it would go pear shaped not long after I dipped a toe into the Casino.

      This Black Will Come Back
      Date and time
      February 04, 2013, 1:24PM
  • Ding dong, Dow Jones @ 14000 ding dong.

    Date and time
    February 04, 2013, 11:36AM
  • Gillard's No1 fan Grattan is leaving fairfax. This will be interesting.

    Another Grump ( I have a leaky tap I call Bracks and a hissing toilet I call Brumby))
    Vic (state of despair)
    Date and time
    February 04, 2013, 11:36AM
  • 10:15 Didn't take long for the market to lose its nerve !

    Another Grump ( I have a leaky tap I call Bracks and a hissing toilet I call Brumby))
    Vic (state of despair)
    Date and time
    February 04, 2013, 11:20AM
  • I don't believe I see many many Bulls,
    Shiploads of Bulls..

    Date and time
    February 04, 2013, 11:17AM
    • So what do you believe?

      Date and time
      February 04, 2013, 11:59AM
    • He reckons he believes what he sees. lol

      Bocky Coy
      Date and time
      February 04, 2013, 12:48PM
    • Should've said "carloads" of bulls. Not sure if they'll fit in, but one can always try. Anyway, sounds like a lot of bull to me.

      Gordon Gekko
      Date and time
      February 04, 2013, 1:01PM
    • Have you heard the story about the old bull, and the young bull ?

      This Black Will Come Back
      Date and time
      February 04, 2013, 1:26PM
    • Yep. Sure have. So, what was the old bull doing to the young bull?

      Gordon Gekko
      Date and time
      February 04, 2013, 2:19PM
  • What is LNC being punished for ?.

    Another Grump
    Date and time
    February 04, 2013, 10:54AM
    • Report on weekend raised doubts about per barrel cost of oil, I think about $30 as stated by Bondy.

      Gordon Gekko
      Date and time
      February 04, 2013, 11:30AM
    • Yeah probably right, but i beleive oil is the smaller part of their operations and the so called big find will not be open for 3 or 4 years by which time the cost of oil will be anyones guess. Still, the market does not run on logic, so no surprise.

      Another Grump ( I have a leaky tap I call Bracks and a hissing toilet I call Brumby))
      Vic (state of despair)
      Date and time
      February 04, 2013, 11:48AM
    • Spoke to LNC;s CFO when stock plummetted down to 50c. He said that if the company had a "Fire Sale" and threw everything the owned on the front lawn the would get at least 1.80 a share. Thats probably a fair price but the No 1 killer to LNC's share price was the introduction of the Carbon Tax.Once again Thank you Julia ( for nothing).

      Date and time
      February 04, 2013, 11:55AM
    • "IT JUST seemed too good to be true"

      Holding shorts at $2.90.

      Date and time
      February 04, 2013, 12:31PM

    Nickname / Times Played / Accum Wkly Points / Points for place / PLACE POINTS (Combined) / OVERALL PLACE

    A Bodhi Nuisance / 9 / 46 / 12 / 23 / 1
    Another Grump / 9 / 31 / 10 / 20 / 2
    Catch 22 / 9 / 38 / 11 / 18 / 3
    Oragelo / 2 / 11 / 6 / 18 / 3
    Snidery Mark / 9 / 30 / 9 / 15 / 5
    Liberator / 5 / 22 / 8 / 13 / 6
    Fletch the Diplomat / 3 / 9 / 5 / 13 / 6
    Oracle / 1 / 8 / 4 / 13 / 6
    The New Black / 7 / 12 / 7 / 8 / 9
    Dan / 2 / 7 / 3 / 7 / 10
    Jonaze / 1 / 4 / 2 / 5 / 11
    Space Hippy / 1 / 3 / 1 / 3 / 12
    Competitors = 12


    Snidery Mark
    Date and time
    February 04, 2013, 10:46AM
    • Hi Snidery,
      Are you finished with this all togther or will you pick up the baton at a later date ?. I am willing to continue it on for another 10 weeks if the rest of the gang want to continue.

      ps On another issue, you may note I changed part of my signature to Vic (State of Despair), and that was before they proposed bringing that damn Bracks back. WTFH.

      Another Grump
      Vic (state of despair)
      Date and time
      February 04, 2013, 11:04AM
    • Need a break, is all, must knuckle down and finish my work - coupla months. Can send you the spreadsheet if you'd like after next week (last round). Has all formulas, etc. Put your e-mail address in format I can send to you.

      Or -

      My e-mail - flick me a note and I'll send you spreadsheet:

      november24sc AT yahoo DOT com DOT au

      (Replace offending words with punctuation)

      Also, Thomas Hunter (one of the authors of this blog) has my e-mail, if you have problems.

      Cheers, Grumpy, condolences, re: Bracks - I'm still obfuscated by Iemma...

      Snidery Mark
      Date and time
      February 04, 2013, 11:24AM
  • Table 2: Closest to the bull.

    Nickname / Times Played / Accum Amt Off / Average Amt Off / Points for place

    Oragelo / 2 / 37.795 / 18.898 / 12
    A Bodhi Nuisance / 9 / 172.681 / 19.187 / 11
    Another Grump / 9 / 210.125 / 23.347 / 10
    Oracle / 1 / 26.848 / 26.848 / 9
    Fletch the Diplomat / 3 / 85.040 / 28.347 / 8
    Catch 22 / 9 / 297.624 / 33.069 / 7
    Snidery Mark / 9 / 381.469 / 42.385 / 6
    Liberator / 5 / 313.543 / 62.709 / 5
    Dan / 2 / 152.341 / 76.171 / 4
    Jonaze / 1 / 84.152 / 84.152 / 3
    Space Hippy / 1 / 85.152 / 85.152 / 2
    The New Black / 7 / 735.703 / 105.100 / 1
    Competitors = 12

    Snidery Mark
    Date and time
    February 04, 2013, 10:38AM
  • 10.15 - did everyone sell so they could watch the Superbowl??

    Date and time
    February 04, 2013, 10:34AM
    • They probably sold as some are calling the end of rate cutting and know the non mining parts of the economy are set to weaken this year.

      If only Julia and Glenn realised the AUD did not appreciate 60% solely because of commodity price increases and therefore will not go down with them any time soon as all that money from overseas is parked here for safe haven and yield as they destroyed their own currencies.

      Time to respond in the currency war as by the time the election comes around that 8% manufacturing that Ross Gittens doesn't care about will vote Julia out of office.

      Opinion Only
      Date and time
      February 04, 2013, 11:11AM
  • WEEK 9 1/02/2013
    Nickname / Prediction / Amt off / Rank / Accum. / Wkly Points / Accum Points

    Liberator / 4926 / 4.904 / 1 / 313.543 / 6 / 22
    A Bodhi Nuisance / 4905 / 16.096 / 2 / 172.681 / 5 / 46
    Catch 22 / 4890 / 31.096 / 3 / 297.624 / 4 / 38
    Snidery Mark / 4962 / 40.904 / 4 / 381.469 / 3 / 30
    Another Grump / 4880 / 41.096 / 5 / 210.125 / 2 / 31
    Fletch the Diplomat / 4860 / 61.096 / 6 / 85.040 / 1 / 9

    Competitors = 6
    AT C.O.B. on 1/02/2013 4921.096
    No Notes: One more week
    2 tables to follow

    Snidery Mark
    Date and time
    February 04, 2013, 10:30AM
  • uh oh, tough luck for those who bought LNC at $2.9

    got brain
    Date and time
    February 04, 2013, 10:20AM
    • Didn't see any recent speeding fines or questions from ASX but another roller coaster day for LNC today.

      Date and time
      February 04, 2013, 3:53PM
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