Australian Shares

by Chris Becker What noise shall we move on today?

Big iron ore is retracing today after the past few days of wild action as BHP falls -0.7%, RIO -1.8% and FMG -11.2% after all hammered higher at the open: Dalian is still limit up at 423 just trying to catch up to spot.

From Brian Johnson at CLSA, the best in the business: BJ notes that having significantly underperformed since the peak in April 2015 the Australian banks have rallied hard in late February/early March 2016 with the rally likely reflecting a prior degree of “over-shorting” and easier global credit conditions.

by Chris Becker It’s all about growth as China sets new targets, iron ore ore smashes to new highs and markets believe the hype as crude oil pushes to new highs – sending the Aussie dollar to the stratosphere as a result.

Angus Nicholson for Chris Weston, Chief Market Strategist at IG Markets The risk-on rally has continued in Asia (ex-Japan) after processing the announcements from China’s National Party Congress and the release of US Non-Farm Payrolls (NFP) over the weekend.

by Chris Becker An eight year low in US unemployment on Friday night as the monthly NFP beat expectations and embiggened risk markets around the world.

From the incomparable bears at Societe General comes Bob Janjuah: 1.     To reiterate my bearish views on risk assets for H1 2016 – I continue to see much lower equity prices, lower core bond yields, wider credit spreads, and weakness in EM and commodities over the next four months (at least).

Chris Weston, Chief Market Strategist at IG Markets There is an air of fatigue from the bulls in a number of developed equity markets, but they continue to grind higher.

by Chris Becker The bear market rally continues as emerging markets lift strongly on the back of commodity prices although oil slipped slightly overnight.

Angus Nicholson for Chris Weston, Chief Market Strategist at IG Markets Markets continue to rally in Asia, although Chinese markets have given up their early session gains.

by Chris Becker The bear market rally is here!

From Goldman: Miners poor at self-regulating supply Despite the considerable fall in global commodity prices, supply side volumes have been slow to respond.

by Chris Becker A big night in stock markets with a new month and renewed vigor for more stimulus from central banks, as the Chinese PMIs continue to slide, German unemployment remained tepid although the ISM manufacturing print came in a little bit better than expected.

Angus Nicholson for Chris Weston, Chief Market Strategist at IG Markets RRR cuts China’s surprise 50 basis point reserve requirement ratio (RRR) cut overnight has not created much excitement in the equity space.

by Chris Becker Well there goes February – did we need the extra day as markets were not happy with the start of the week/end of month nexus overnight.

Note to self, short Perpetual!

Chris Weston, Chief Market Strategist at IG Markets We close out the month of February with a mixed picture in Asia after what has been a massive month for traders.

It’s BTFD day, whatever it is!

by Chris Becker A mixed Friday characterised another volatile week on risk markets with two important prints accelerating the divergence between the European and US economies.

A couple of IB takes on the ASX profit season are worth a look today.

From Societe General: …forward earnings expectations are now falling fast, so whilst MSCI World has fallen by around 15% since May last year, 2016 EPS levels are now down 12% over the same period.

Angus Nicholson for Chris Weston, Chief Market Strategist at IG Markets G20 in Shanghai: Morning Zhou After a few months out of the media, People’s Bank of China (PBoC) Zhou Xiaochuan made his second appearance in a week.