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This time it was in the form of retail sales, which showed a 0.5% (versus 0.4% expected) increase in the core reading and a 0.2% rise in the headline reading which was relatively in line with consensus. This saw the G10 currencies offered against the greenback as the dollar index gained 0.5%, with one of the most significant moves being in USD/JPY.
Atlanta Fed president Dennis Lockhart was also on the wires, reinforcing what we have heard from other Fed members regarding tapering by the end of this year. After a long period of underperformance, USD/JPY seems to be back in its stride and rallied through 98 to a high of ¥98.34. With renewed yen weakness, the Nikkei is also looking at a positive session and we are currently calling it up 0.7% at 13,970. Perhaps reports that Prime Minister Abe is considering lowering corporate tax rates to counter the sales tax hike will continue to gain momentum and underpin the Nikkei rally.
AUD/USD is hanging around the 0.91 level today and there isn’t much to look out for on the calendar with just the Westpac consumer sentiment and wage price index data due out. With limited releases on the local front this week, focus will remain on the USD side of the equation and how QE tapering expectations shape up.
Ahead of the open, we are calling the ASX 200 up 0.4% at 5,179 with some big earnings in focus. After the market cleared resistance at 5,150 yesterday, the next level to look out for is 5,200 ahead of this year’s highs at 5,250. The broker ratings changes are also rolling in following recent earnings reports while companies like RIO and ResMed go ex-div today.
With the likes of Commonwealth Bank of Australia (CBA), CSL Limited (CSL), Computershare Limited (CPU), OZ Minerals Limited (OZL), Leighton Holdings Limited (LEI) and Worleyparsons Limited (WOR) on the wires today we are bound to see some big moves across most sectors. Most of the stocks mentioned are sector leaders and tend to set the pace for the sectors they trade in. We will also keep a close eye on the resource names after some fairly hefty gains over the last few days.
BHP’s ADR is pointing to a 0.2% rise to 37.02 whilst iron ore jumped 2.2% to 141.8. Other commodities were relatively mixed with gold losing ground due to US dollar strength. CBA has reported its FY13 results and it certainly seems our biggest bank has delivered a solid result. FY cash earnings came in at $7.819 billion (versus consensus $7.6 billion) while a $2 dividend was in line with consensus. CBA’s net interest margin of 2.13% was also ahead of a 2.11% consensus. With this in mind, CBA’s all-time high of $74.90 will be in focus today and after a big run heading into the result, it’ll be interesting to see if investors continue to push the stock higher today. Some traders will be looking to take profits on a big jump at the open.
CSL’s net income of $1.22 billion seems to have come out in the middle range of analysts’ expectations and has flagged potential for another buyback. CSL will also have its all-time high of $68 in focus today.