22 Feb 2019
Aussie dollar falls on Chinese port coal ban
- Both local and global stock markets pushed higher this week, supported by dovish comments from both US and European central bank members.
- In local stock news, Domain shares rose strongly as the real estate listing company’s 1st half loss was less than investors had expected.
- Westpac bank reported over $2bn in profits during the 4th quarter of 2018, up nearly 7% on previous quarters, helped by wider margins and lower costs for compensation.
- ANZ bank released a December quarter update which highlighted a very low bad debt charge, which was below the same time last year and well below market estimates.
- Shares in rubbish collector Bingo plummeted almost 50% with slowing construction activity across Sydney and Melbourne apartment markets denting profits.
- Blackmores’ shares fell sharply as the market zeroed in on their China results where the company warned sales were not expected to grow in the next 6 months.
- Coles and BHP share prices also fell after both companies reported weaker than expected results. In BHP’s case, it was production disruptions and a decline in commodity prices which hurt.
- The Aussie dollar fell this week following reports that a key Chinese port had stopped accepting Australian coal.
- US industrial production fell in January against expectations of a rise whilst manufacturing production fell by the largest amount in 8 months. Motor vehicle parts and production also tumbled. Manufacturing accounts for 12% of the US economy.
- US consumer sentiment rose in January, which was better than economist expectations.
- Data showed US retail sales suffered their largest drop since September 2009.
- A US central bank member was quoted as saying that a different economic outlook would be necessary for the Fed to resume its interest rate hikes.
- Germany’s anaemic economic growth continued in the 4th quarter of 2018 with the economy very close to falling into recession. Slowing growth in their key export partners (China, Europe) the problem along with lack of fiscal stimulus.
- Comments from a senior European central bank official seem to indicate that a new monetary measure was possible and being discussed, to help support banks further and potentially lift economic growth in the region.
- Chinese export growth came in better than expected in January with a 9.2% increase on the same time last year versus median economist forecasts of 3.3%.
- President Trump signed a budget deal to avoid another partial closure, but then declared a state of emergency at the country’s southern border, which means he can use executive orders to pull funding from critical areas to fund his border wall. No doubt the Democrats will do everything in their power to stifle his move.
- The Spanish Prime Minister called a snap election after the parliament vetoed his minority government’s budget.
- US and China trade talks will resume in Washington next week with both sides saying progress has been made toward resolving the trade dispute.
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