Australian Shares

The AUD is holding up this morning despite the NAB survey swoon: Bonds are consolidating after the big bid.

The Australian says: Escalating China-US trade tensions pummelled the Australian sharemarket yesterday, pushing the local bourse to record its third $35 billion-plus wipe-out in as many months.

By Chris Becker After a solid session of selling in Asia yesterday, European stock markets lost all their confidence later in the session as PM Theresa May lost her bolt on the Brexit vote, sending Pound Sterling down to a new low for the year.

It’s been a relatively good finish to the trading week here in Asia despite epic overseas volatility with stock markets putting scratch sessions or slightly higher closes.

By Chris Becker US markets reopened and immediately went into sell mode overnight, down nearly 3% in mid-session before a late rally saw prices recover to a scratch session.

It’s been a straight risk-off session here in Asia as the Huawei headlines are fracturing the possibility of a trade deal between the US and China, fueling safe haven bids and dumping of stocks.

Via the ABC: Canada has arrested Huawei’s global chief financial officer in Vancouver, where she is facing extradition to the United States on suspicion she violated US sanctions against Iran, reports say.

By Chris Becker Risk markets were helped overnight due to the US holiday although European bourses caught up to the previous Wall Street carnage, like in Asia yetserday the falls weren’t as strong.

The carnage from Wall Street overnight has not been exactly translated into the same falls here in Asia, but it’s certainly sent volatility higher as the fallout from the US/China “trade deal that’s not a deal”.

By Chris Becker Big falls overnight as risk sentiment reversed and then slumped as it became apparent that The Great Deal Maker was full of hot air over the US/Chinese trade war truce.

The positive mood from the weekend’s G20 meeting has turned sour as the Trump trade “deal” between China and the US has fizzled into empty promises with both sides dialing back expectations.

The AUD is roughly flat through the morning: Bonds are threatening to break out as the bid booms.

By Chris Becker The positive outcome from the weekend G20 summit continued overnight after making stocks and risk currencies gap on Monday morning.

The weekend’s G20 meeting with the trade war truce between China and American has seen some big gaps up in risk assets, with Chinese stocks in particular rallying hard.

By Chris Becker  Looking at Chinese stocks first, where last week saw the Shanghai Composite again fail to stabilise above tentative support at the 2600 point level, but at least there hasn’t been any new lows.

Outside Australia it’s been a good finish to the week on stock markets across Asia as aniticpition builds for the Trump-Xi meeting at the G20 conference this weekend.

A fairly muted response to the big surge on Wall Street overnight here in Asia today, with modest gains outside of China, while the Middle Kingdom share markets suffered a small setback.

AUD is down during the morning after the big spike: Bonds are bid again: XJO is up meekly: Big Iron is up and away.

Via Damien Boey at Credit Suisse: In our recent note “Style rotation after a panic”, dated 31 October 2018, we highlighted that for this stage of the risk appetite recovery cycle, value has been underperforming badly as a style, while quality has been significantly outperforming.

By Chris Becker The Fed has spiked the punch bowl with Chairman Powell seeming to backtrack the faster pace of normalisation of interest rates in a speech overnight.

Outside Australia, it’s been a good day for stock markets across the region with currency markets relatively quiet leading up to an important speech by Fed Chair Powell tonight, which is likely to involve some twitter dribbling in response from Trump.

The AUD is down during the morning after poor construction work done: Bonds are bid but nowhere near enough.

Via the AFR comes T Rowe Price’s head of Australian equities, Randal Jenneke: The fund manager’s base case view sees house prices falling by between 10 and 20 per cent, but outside factors such as the 2019 federal election could escalate the downturn.