With uncertainty the order of the day, expert investors are urging care when looking at traditional safe haven assets.
Global treasuries and gold bullion have long been the refuge of spooked investors, but unconventional monetary policy and fiscal policy confusion have rendered them less secure.
“We are particularly underweight on global treasuries because that very low yield level means they are no longer an obvious safe haven for investors,” says Kevin Anderson, head of investments in Asia Pacific for State Street.
“In times of great concern we certainly do see investors increase their allocation to gold as well, but one of the drawbacks of that is it is a zero-yielding investment.”
The rapid onslaught of President Trump’s anti-immigration policies, brash comments about currency manipulation and protectionist trade stance have investors contemplating a very different world economy.
As such, gold prices have risen 2.8 per cent to $US1212.8 an ounce in the last five days, with analysts pointing to the ongoing uncertainty around Mr Trump’s policies as the main influence.
Investors in bonds were alarmed last year when yields sank into negative territory, rendering one of the market’s “safest” assets a potential drain on funds. But as Mr Anderson suggests, it all hinges on interest rates.
“Given yields are so low at the moment, a move upwards could cause a capital loss that eats through that yield protection you have,” he said.
The US Federal Reserve kept interest rates on hold this week, after lifting them in December. However, investors are positioning themselves to absorb three additional increases totalling 0.75 percentage points this year.
Gold is often a helpful market barometer of nervous behaviour and despite these recent moves, it remains one of the worst-performing assets since Mr Trump’s election.
Funds have flowed out of the $30 billion SPDR Gold ETF for 10 out of the 11 weeks since the November election, including a 1 per cent decline in the week ended on January 25, according to Reuters data.
Shares in OceanaGold have slumped on a statement by the Philippine government it may force the closure of the Aussie company’s Dipidio mine, which has been the subject of recent wrangling between the company and the government.
In late trading, shares in the miner were down 15 per cent at $3.84.
At a press conference earlier today, the Philippine government named the company’s Dipidio mine among four mines that are subject of a proposed suspension order due to alleged declining agricultural production in the area of the mine
In a statement, the miner’s chief executive slammed the decision as “unjustified”.
Meanwhile, shares in ASX listed nickel miners Western Areas and Independence Group both surged in the wake of the announcements.
Most of the mines suspended are nickel mines, and the announcement continues the policy shocks in the nickel sector, which was battered last month when Indonesia relaxed a ban on raw material exports.
Western Areas shares were up 10 per cent while Independence Group shares were up by more than 4 per cent.
After embarrassing outages in 2016, the Tax Office and Telstra are both suffering another day to forget with services brought offline.
The ATO website has been down for most of the day with another mass outage occurring as a consequence of the collapse of its Hewlett-Packard Enterprise hardware systems in December.
At the same time some customers of telecommunications giant Telstra are unable to use fixed line and mobile services because of a fire at one of its exchanges.
The fire at the Chatswood exchange has been contained, but damage has been caused to some power infrastructure, Telstra’s general manager Steven Carey said.
The outage is having widespread consequences, with nine Jetstar flights delayed due to disruptions to check-in ports, and NAB warning its online customers of delays to SMS alerts.
“Our technicians are currently completing a full assessment of the impact. We will provide more information as soon as it is available,” Telstra said.
The outage that began just before 2pm AEDT, is the eighth to hit Telstra in 12 months.
Telstra shares are down 0.8 per cent at $5.03, after rising as much as 1 per cent this morning.
Just to recap: the Aussie dollar has jumped two-thirds of a cent to its highest since the immediate aftermath of the US election after Australia posted its biggest trade surplus on record, thanks to surging commodity prices.
The Aussie has extended the gains it made shortly after the data was published to hit a session high of US76.48¢, the highest since November10.
Official data showed a trade surplus of $3.51 billion in December, handily outpacing forecasts of $2.2 billion. The previous month was also revised up sharply to $2.0 billion.
The windfall could lessen the risk of a downgrade to Australia’s triple A credit rating and ripple through the economy via higher profits, incomes and tax receipts.
The massive trade surplus lit the fire under the Aussie dollar, said AxiTrader chief market strategist Greg McKenna.
“This (trade surplus) is the catalyst that the Aussie dollar has been waiting for, and it propelled the Aussie back above US76¢,” he added. “Looking at the AUDUSD at present though it needs to break near-term resistance at US76.40¢ to kick up towards 77.40/60. If that breaks then the April 2016 high around US78.30¢ comes into play.”
Looking further ahead, McKenna says it’s not inconceivable the Aussie tops US80¢ later this year if trade surpluses continue to come in and the worlds reflates.
But TD Securities strategist Annette Beacher reckons the future direction of the Aussie is more tied to US policy and the greenback than to domestic issues.
The greenback has sagged over the past weeks as investors became increasingly risk averse due to US President Donald Trump’s protectionist policies, but a number of expected rate rises by the Fed this year should support the US dollar.
Tabcorp CEO David Attenborough is betting on the future, writes AFR Chanticleer columnist Michael Smith:
The sharp drop in Tabcorp’s half-year earnings are a reflection of the heavy investment chief executive David Attenborough is making to make sure the wagering giant stays relevant in the digital age.
Technology, regulation and new online competition have been the biggest threats for Attenborough for more than five years as he has reshaped the business with a strategy that meant he could not afford to be conservative when it come to capital investment and acquisitions.
The main prize remains the $11.3 billion merger with Tatts Group. If successful, Attenborough will run the biggest gaming group in the country and have the ability to compete with the growing number of overseas online rivals like PaddyPower and William Hill.
Attenborough told analysts on Thursday he expected that deal to be completed by mid-2017 and said talks with the competition watchdog were ongoing.
“We are working closely through all the questions that flow out of such a process. And we still expect the transaction to complete mid-2017,” Attenborough said without giving much away. The potential privatisation of the TAB in Western Australia before a March state election is another issue which could have an impact on the competitive landscape.
Regulatory hurdles aside, the main threat to Tabcorp’s biggest deal since it spun-off the casino businesses in 2011 is a potential rival offer from a consortium of infrastructure investors known as the Pacific Consortium.
The consortium, which includes private equity firm KKR, Morgan Stanley’s infrastructure arm and First State Super, are expected to wait and see what Tatts’ results are like in on February 20 before it makes its next move. It could up its bid for Tatts, try and find a buyer for the lotteries business or walk away altogether.
Global trade conditions would be set back to levels not seen for 70 years if US President Donald Trump delivers on his campaign promise to impose 45 per cent tariffs on Chinese imports and 35 per cent on Mexican imports, says a leading Goldman Sachs economist.
“If we translate that into average tariff rates on just those two countries that would take us back to the tariff levels that prevailed at the end of World War II,” Goldman Sachs chief economist Jan Hatzius told an audience in Sydney on Thursday.
“A more realistic expectation might be something closer to 3 to 4 per cent increase rather than an 11 per cent increase but even that would undo the trade liberalisation that has taken place since the Reagan administration.”
“We do think it would be a negative partly through the reduction in the international division of labour and partly though adverse macro effects – higher inflation and tighter Fed policy.”
The widely followed Goldman Sachs economist said he was forecasting three interest rate hikes from the US Federal Reserve in 2017, compared to the market’s forecast of two increases. He is also expecting the US economy to achieve above trend annual growth of 2.5 per cent.
But he did identify three key risks in the global economy – a protectionist policy turn in the US, weakness in peripheral Europe and a debt boom in China that shows no signs of abating.
While rates may be on the path of normalisation, the relationship between the White House and the Federal Reserve will be “unlike what we have had for the last 20 to 25 years”
Up until now, the President has tended to avoid commenting on and seeking to influence monetary policy and the currency. But the signs so far is that is about to change.
Hatzius says he’ll be watching Twitter to see how US President Trump responds to the interest rate hikes he is predicting.
The proportion of foreign investors paying cash to settle new Melbourne apartment acquisitions has surged to more than 35 per cent from just five to 10 per cent in the past, after the major banks quit offering finance to overseas buyers last year.
BRW Young Rich Lister Tim Gurner said over 35 per cent of Foreign Investment Review Board (FIRB)-approved buyers had paid cash to settle apartments in Ikebana, a recently completed Gurner development in West Melbourne.
“Previously we saw cash settlements in the realm of five to 10 percent [of FIRB buyers],” Mr Gurner said.
Nearly half of the 241 apartments in Ikebana were bought by FIRB buyers. Prices start from about $400,000 for a one-bedroom apartment up to more than $700,000 for a two-bedroom unit.
The cash payments helped Gurner repay a $90 million construction loan to NAB. A $40 million ANZ loan was also repaid for another project, 107 Cambridge Street in Collingwood with 91 apartments, which did not have any foreign buyers.
Nick Holuigue, a partner in law firm Maddocks’s development practice, said there had been an “unusually high percentage of cash buyers” as a proportion of projects that settled in December.
Just over 1000 apartments and residential lots settled through Maddocks in December including Gurner’s Ikebana development.
The rise in all-cash payments by Chinese investors – which don’t require the usual inquiries made by lenders – may raise eyebrows at the government’s anti-money laundering agency Austrac after a surge in suspicious property transactions last year. Austrac investigated about $1 billion worth of property investments from China in the year ended June 30.
As the local banks have tightened their policies to foreign buyers, Mr Cathcart said there was a very large middle class pool of buyers from China who had have the money to settle in cash.
The market’s honeymoon with Trump may be over, AMP Capital’s Shane Oliver says, but he still expects shares to trend higher over the next six to 12 months.
Oliver concedes that there are a number of risks associated with Trump, who is anything but a conventional president.
As examples he cites ill executed policies such as the recent travel ban, but also the possibility of a global trade war or even an impeachment.
There’s also the chance that his growth-friendly policies overstimulate an economy already running near capacity, forcing the Fed to lift rates faster than it would like to, thus sparking a downturn.
These risks were real but they shouldn’t be exaggerated, Oliver says, listing a few things investors should keep in mind when assessing Trump:
- all new administrations make mistakes initially
- Trump is not a traditional Republican president, as some of his policies borrow from the left
- his support base is middle America: getting stuck in a trade war with China that pushes up prices at Walmart by 20% wouldn’t go down well with his base
- his direct approach to communication: We have to get used to a lot more noise coming out of Washington, but the key is that much of it will be just that: “noise”
- he is a businessman and negotiator: some of his recent threats may just be opening gambits in a negotiation designed to extract a better trade deal
- limited time to get his agenda through Congress: The President’s party normally loses control of it in the mid-term elections – so he doesn’t want to waste too much time.
“Given all this I remain of the view that despite the rough start the pragmatic growth focused Trump will ultimately dominate the populist Trump,” Oliver says, warning that it will take a while for his pro-growth policies to be legislated.
Shares remain vulnerable over the short term, as they have become technically overbought following the big expectations of a Trump boos to the economy, he says.
“Despite the likelihood of a bout of short term market turbulence we see sharemarkets trending higher over the next 6-12 months helped by okay valuations, continuing easy global monetary conditions, some acceleration in global growth, rising profits in both the US and Australia, and as Trump’s pro-growth policies start to impact.”
Some economist reactions to the super-sized gains in the trade surplus and its meaning for economic growth and the RBA.
Bottom line is the bumper figures mean a) a ‘technical recession‘ of two quarters of economic growth contraction is now highly unlikely, b) expect more trade surpluses in 2017 and c) the RBA is now even less likely to cut rates again
Tapas Strickland, NAB:
The surplus reflects a positive story of higher commodity prices and rising export volumes, which should support economic activity in 2017. A string of further trade surpluses is likely over the first half of 2017 given higher commodity prices and increasing volumes. (The bumper numbers) should eliminate any fears out there that Australia was at risk of recording a ‘technical recession’ after the weak Q3 GDP figures.The trade balance may also make a credit rating downgrade by S&P less likely.
Tom Kennedy, JPMorgan:
The volatility in trade outcomes owes to the growing share of resources commodities in Australia’s trade basket, which has seen exporter revenues become increasingly sensitive to swings in iron ore, coal and LNG prices. Several large LNG projects currently under construction are expected to be completed in the coming months, with production capacity to increase steadily through 2017. As a result, we retain the view that net trade will continue to support real GDP in the year ahead, as well as in early 2018.
Paul Dales, Capital Economics:
The surge in the international trade balance to a record monthly surplus dramatically reduces the chances that real GDP contracted again in the fourth quarter of last year. That’s despite a fall in building approvals in December further weakening the outlook for dwellings investment. Overall, a record trade surplus shows that the surge in commodity prices is boosting nominal GDP and the most recent increases in the volume of exports implies that real GDP in the fourth quarter of last year at least may prove to be a bit stronger than we had thought.
Rahul Bajoria, Barclays:
In our view, the RBA appears comfortably placed after cutting rates twice last year (May and August), especially given the more neutral tone of its recent policy statements. However, the softness in imports, coupled with a gradual improvement in employment and modest wage growth should add to the RBA’s confidence on pursuing a stable monetary policy. Unless there is significant AUD appreciation, we think the central bank’s bias will be to keep rates unchanged for some time.
Shane Oliver, AMP Capital:
While higher commodity prices explain most of move into a trade surplus, export volumes also look to have increased by around 3% or so. But import volumes also look to have risen such that net exports are likely to have been flat to only slightly positive in the December quarter. Still a big improvement after the September quarter detraction. The turnaround in commodity prices signals a large boost to national income which will help Australian economic growth this year (partly offsetting the slowing in housing construction growth). That said, further large gains in bulk commodity prices are unlikely – if anything they may fall back a bit.
Josh Williamson, Citi:
China is responsible for most of the hard commodities outperformance in November and December. We believe that China’s boost to Asian trade will continue into Q1, which will support Australian hard commodities exports. And thanks to the previous large investment in mining capex, Australia can now produce the quantities of iron ore and coal that China demands. However, moving into mid-year and beyond we see slowdown risks from more sluggish Chinese real estate activity, liquidity/funding pressures from Chinese capital outflows, rising trade frictions with the US and some downturn in hard commodity prices that argue against China further driving a large trade surplus in the long run. Such likelihood argues against the federal government boosting their budget revenue numbers in future years, should that be the Treasurer’s temptation.
Paul Bloxham, HSBC:
All that mining investment is finally paying off! Australia’s exports are booming. This story is all the more interesting because it is quite unique in a world of weak trade growth and rising fears of protectionism.The rise in exports is being driven by both growth in volumes, which have been trending higher for some time now, as new mining capacity has been coming on-line, and a recent sharp pick-up in commodity prices. Australia is now, finally, benefiting from the ramp up in commodity export volumes with higher commodity prices boosting its incomes.
It’s supposed to be the best earnings season in years, but the start hasn’t been encouraging (today’s strong Downer result is missing on the following list):
Profit watch 2017
And this is just to 1 Feb.
I think we’ll need a longer whiteboard. pic.twitter.com/Zh01Ze9afv
— Charlie Green (@canetoadqld) February 2, 2017
Blockbuster gains in Aussie banking stocks over recent months were “largely underpinned” by foreign buying as global investors became less negative on the sector, Macquarie analysts reckon.
In contrast local retail investors were happy to “sell the rally”, the analysts conclude.
The election of Donald Trump as US president lit a fire under banking stocks around the world, and our big Aussie lenders were no exception. Since November 8, the ASX 200 banks index is up 11 per cent.
Finding out which types of investors are buying and which are selling is not an easy process, with brokers wary of revealing their clients’ activities. But it is useful as a way to understand the dynamics of market moves, particularly such powerful ones as the rally in the major banks since the election. It also comes at an interesting juncture as analysts and investors ponder whether now is the time to take profits in the sector.
Macquarie’s “trading analysis” finds that offshore investors “continued to close their underweight positions” and were net buyers of Aussie banking stocks – bought more than they sold – over the final three months of 2016. This shift meant foreign buying “largely underpinned” recent bank outperformance, the Macquarie analysts write.
Perhaps reflecting this, short interest in the majors continued to decline at the end of 2016. Around 1.1 per cent of the Big Four’s combined stock is sold short, or around $5.4 billion’s worth. (A short position represents a bet that the share price will move lower.) This is down from about $6.6b at the end of September last year, Macquarie analysts note, and is “significantly lower”, they say, than the peak observed leading into May 2016 reporting season of around 2.4 per cent, or $9.4b.
Interestingly, short positions in CBA bucked the trend of its rivals and actually increased over the final three months of the year.
But while overseas investors were buying, local retail investors – which make up around half of the big banks’ share registries – were net sellers for the second quarter in a row.
“Retail investors appeared to maintain their fairly consistent strategy of buying the dip and selling the rally,” the Macquarie researchers write.
Around 30 per cent of the big fours’ shares are in the hands of professional Aussie investors, and around 20 per cent is in the hands of foreigners.
As mentioned, the Aussie dollar jumped on the bumper trade data, pushing strongly past 76 US cents – a recent resistance level – and has now pretty much reversed the post-US election decline triggered by the surging greenback.
January has been an incredible month for our currency as much of the Trump enthusiasm leached out of the US dollar, while continued strength in key commodity prices has buoyed export values and mining stocks.
At 76.34 US cents, the Aussie is now up 5.8 per cent in 2017 and the best performer against the US dollar among the 16 major currencies, with New Zealand’s 5.2 per cent gain in second place.
The trade numbers may have exceeded all expectations, but it’s not all rosy for the economy: new housing approvals slipped to their weakest monthly total in more than two years in December, in a further sign of a sector tightening the taps on new developments.
New dwellings given the nod by planning authorities slipped 1.2 per cent to a seasonally adjusted 17,327 in the last calendar month of the year, the lowest since the 16,158 approvals made in September 2014.
Approvals of detached houses led the fall, dropping 2.2 per cent month on month to 9,279, a three-year low. The number of new apartments, townhouses and semi-detached dwellings approved was little changed from November at 8,049.
The figures continue the notion that Australia’s housing construction sector is slowing new projects in response to tighter credit conditions for consumers and greater constraints on construction finance. For the year to December, total new approvals fell 3.8 per cent from the same time a year earlier to 230,813, the lowest figure since May 2015.
A spectacular surge in coal and iron ore prices has delivered Australia its biggest trade surplus on record, providing a major boost to the federal budget and spurring hopes that sluggish national income growth will dissipate rapidly in 2017.
The surplus jumped in December to $3.5 billion from $2.04 billion in November, exceeding expectations of a surplus of $2 billion in the month. A 5 per cent rise in exports to $31.1 billion easily offset a 1 per cent lift in imports to $28.6 billion.
The Aussie dollar shot up by 0.5 per cent to US76.3¢ on the strong data.
Wagering giant Tabcorp’s first-half financial results have been hit by large costs associated with money laundering investigations into the company, its push into the United Kingdom and its pending merger with Tatts Group.
Net profit after tax but before significant items for the six months ended December 31 rose 5.3 per cent to $102.7 million from $97.5 million in the year-earlier period; the result was in line with consensus analyst expectations.
Statutory net profit fell 28.1 per cent to $58.9 million after $43.8 million worth of significant items, including $20 million worth of legal costs related to “dirty money” claims brought by government agency Australian Transaction Reports and Analysis Centre (Austrac).
The initial reaction from investors has been negative, with Tabcorp shares down 4 per cent to $4.56.
Tabcorp also revealed it had spent $17.9 million on its UK start-up SunBet, an online betting joint venture with Rupert Murdoch‘s News Corporation that launched last August, $9.1 million on its bid for Tatts Group and another $4.1 million on its $128 million acquisition of gaming technology group INTECQ.
SunBet had revenue of $1.5 million and the business recorded an EBITDA loss of $21.3 million. Tabcorp said its result for the second half of fiscal 2017 is expected to be an EBITDA loss of about $15 million.
The first half of a financial year, which includes the popular spring racing carnival in Melbourne, is usually Tabcorp’s strongest half. The group revealed digital turnover on its TAB app had risen 13.8 per cent in the six months
“Wagering and media continued to respond to the highly competitive environment and TAB had a record-breaking Spring Racing Carnival,” chief executive David Attenborough said.
He said Tabcorp’s proposed merger with Tatts was in progress, with the group going through the process of various regulatory approvals including negotiating with the ACCC.
“In the second half we are focused on driving business performance and progressing the proposed combination with Tatts Group.
“The combined group will have a suite of long-dated licences and an expected strong investment grade balance sheet. This will provide more capacity to invest, innovate and compete in an evolving global marketplace.”
Tabcorp will pay an interim dividend of 12.5¢ per share, fully franked, to shareholders on March 15.
Last year’s rally in miners that took many investors by surprise is showing few signs of fatigue in 2017.
After rising nearly 40 per cent in 2016, the materials sector has added more than 6 per cent so far this year, by far the strongest gains on the local sharemarket.
While some analysts are warning that the good times for commodity prices won’t last, Deutsche strategist Tim Baker is keeping the faith, listing five reasons to stick with miners:
- Miners are still in an earnings upgrade cycle: Share prices look to be pricing in current earnings forecasts, but spot prices imply large upgrades to forecasts (over 50%).
- Free cash flows reaching record highs: High commodity prices and restrained capex should create record free cash flows for miners. This spells higher dividends and potential buybacks for shareholders.
- Underweight investors may get squeezed in: The data show limited buying of non-financials by foreign investors.
- China’s cyclical upturn looks to have momentum: Nominal GDP growth has doubled to reach 11%, and lead indicators are positive.
- China overinvestment story seems exaggerated: Capex measurement can be tricky. Steel use is a more transparent concept, and China doesn’t look overinvested on this basis.
Risks Baker sees to his bullish outlook include slowing Chinese growth, renminbi pressure or a strengthening US dollar hurting commodity prices.
The battle for control of the board of stricken infant formula maker Bellamy’s is heating up, with the company bringing in a proxy firm to help canvass shareholders ahead of a vote that will decide the fate of four independent directors.
Bellamy’s Australia is working with proxy solicitation firm GPS, seeking feedback from its investor base, which has significantly changed over the past week ahead of an extraordinary general meeting set for February 28.
One new investor the company has reached out to is US hedge fund Delta Partners, which popped up on the company’s share register on Friday.
The organic baby food and formula maker is fighting to keep four independent directors on its board. The board has unanimously recommended shareholders vote against all resolutions proposed by 14.48 per cent shareholder Black Prince Private Foundation, which first came to light on January 4.
Black Prince is connected to Tasmanian entrepeneur and Kathmandu founder, Jan Cameron, the defacto leader of dissident shareholder group that claims they represent 35 per cent of the register.
Bellamy’s shares are up 2.4 per cent to $4.30, extending their recent gains. The shares have been on a roll over the past week, rising nearly 13 per cent.
Shares are nudging higher in early trade, led by a spike in Downer EDI following a strong earnings report.
The ASX is up 0.2 per cent at 5663.6, with the energy sector rising 0.8 per cent, followed by a 0.6 per cent gain in materials.
Burt overall investors are likely to remain cautious, says CMC chief market analyst Ric Spooner.
“The market looks like consolidating again today as investors wait on the reporting season and in the absence of any overnight news to change the macro outlook.”
Among the blue chips, BH Pis up 0.5 per cent, Rio has added 1 per cent while the big banks are all posting small gains.
Some encouraging corporate news: Downer EDI shares have shot up in opening trade after the contractor raised its full year profits guidance.
Diversifying away from mining helped the contractor deliver a 8.5 per cent increase in interim net profit to $78.2 million. The rise was higher than some analysts expected. Citi had forecast net profit of $69.5 million.
Shares have jumped 17 per cent to $7.31.
Downer has also lifted its full year net profits guidance by 7 per cent to $175 million from $163 million after winning more than $20 billion in new contracts in the first half of 2017, including a $2 billion contract to deliver Victoria’s high-capacity Metro trains project and a $1 billion suburban trains contract for Sydney’s rail network.
Earnings rose in Downer’s transport services, technology and communications, rail and engineering, construction and maintenance businesses compared with a year earlier. But earnings fell in its mining and utilities services divisions as contracts were completed.
Downer will pay an interim dividend of 12¢ per share, flat on a year earlier.
There’s lots of smoke, but stockmarkets are failing to fire, writes IG strategist Chris Weston:
As it stands today there seems little to necessarily inspire the buyers, although we are seeing signs that the oil market could be ready to make a push higher. The various ADR’s suggest modest upside for BHP on open, while CBA looks set to drop a touch.
The FOMC meeting was a fairly uninspiring affair, as largely expected, with the CME Fedwatch pricing at just 4 per cent of a move today. After careful analysis of the statement market pricing around future rate hikes for 2017 has dropped a touch, but around two hikes are still expected, with the prospect of a move in March a lowly 17.7 per cent.
On the political front, the big development has been Theresa May’s Brexit draft passing the first vote in parliament by 498 to 114 votes. A three-day discussion will commence on Monday, with a final vote in the Commons on Wednesday, with the House of Lords then set to pass shortly after. GBP/USD has rallied on the clarity to $US1.2274 (at the time of writing) and new highs for the year, with the focus now turning to tonight’s Bank of England meeting and the market expecting slight revisions to the bank’s inflation and growth targets for 2017.
We are calling the ASX 200 to open unchanged at 5652, with SPI futures up modestly in the overnight session. We continue to watch the 5555 area in the SPI futures and 5600 level in the cash market, as a break here sees price print a lower low and suggests a fairly quick response down to 5525 (in the cash).