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ASX to slip, overseas shares sink on rate angst - 20/01/23

Market Highlights

ASX futures down 1 point to 7385 near 6.15am AEDT
AUD -0.5% to 69.06 US cents
Bitcoin +0.4% to $US21,017 at 6.15am AEDT
On Wall St near 2.15pm: Dow -0.4% S&P -0.4% Nasdaq -0.6%
In New York: BHP +0.9% Rio +1.2% Atlassian -1%
Tesla -0.7% Apple +0.04% Amazon -1.8% Alphabet +2%
In Europe: Stoxx 50 -1.9% FTSE -1.1% CAC -1.9% DAX -1.7%
Spot gold +1.1% to $US1924.68 an ounce at 2.07pm New York time
Brent crude +1.5% to $US86.21 a barrel
10-year yield: US 3.39% Australia 3.32% Germany 2.05%
US prices as of 2.04pm in New York
Australian shares are poised to open lower, taking their direction from further weakness overseas as policymakers continue to argue that interest rates must rise higher to drive inflation lower. Wall Street had pared early losses by mid afternoon.
ASX futures were down 1 point to 7385 near 6.15am AEDT.
The local currency slid 0.5 per cent, with the currency briefly trading with a US68¢ handle; the Bloomberg dollar spot index edged lower.
The yield on the US 10-year note was 3 basis points higher to 3.39 per cent at 2.04pm in New York.
On Wall Street, all three main benchmarks were lower at 2.15pm, though off their session lows.
In Davos, European Central Bank president Christine Lagarde held firm.
“Inflation by all accounts, whichever way you look at it, is way too high,” Lagarde told a panel. “We shall stay the course until such time we have moved into restrictive territory for long enough so that we can return inflation to 2 per cent in a timely manner.”
In remarks prepared for a speech in Chicago, Federal Reserve vice chair Lael Brainard said: “”Even with the recent moderation, inflation remains high, and policy will need to be sufficiently restrictive for some time to make sure inflation returns to 2 per cent on a sustained basis.”
Federal Reserve Bank of Boston president Susan Collins earlier said she favours a more moderate pace of interest-rate increases, even as the central bank continues to tighten policy to reduce high inflation.
“Now that rates are in restrictive territory and we may — based on current indicators — be nearing the peak, I believe it is appropriate to have shifted from the initial expeditious pace of tightening to a slower pace,” she told a housing conference hosted by her bank.
“More measured rate adjustments in the current phase will better enable us to address the competing risks monetary policy now faces.”

Movers & ShakersBroker Upgrades & Downgrades

(AKE) Allkem Price Target Cut 2.9% to A$19.80/Share by Canaccord Genuity
​(AKE) Allkem Price Target Cut 3.2% to A$15.20/Share by Morgans
​(AKE) Allkem Target Price Cut 4.8% to A$20.00/Share by Macquarie
(CPU) Computershare Price Target Cut 8.7% to A$27.75/Share by Jarden
(CSL) CSL Price Target Cut 1.5% to A$335.00/Share by Citi
(GPT) GPT Group Price Target Raised 7.6% to A$4.84/Share by Morgan Stanley
(KAR) Karoon Energy Price Target Cut 2.1% to A$2.30/Share by Jarden
(NIC) Nickel Industries Target Price Raised 3.2% to A$0.97/Share by Macquarie
(NIC) Nickel Industries Price Target Raised 14% to A$1.25/Share by Citi
(PRU) Perseus Mining Target Price Raised 4.2% to A$2.50/Share by Macquarie
(RMD) ResMed Price Target Cut 1.3% to A$37.00/Share by Citi
(STO) Santos Price Target Cut 1.9% to A$7.90/Share by Jarden
(SCG) Scentre Price Target Raised 18% to A$3.55/Share by Morgan Stanley
(SHL) Sonic Healthcare Price Target Cut 5.9% to A$32.00/Share by Citi
(RBL) Redbubble Price Target Cut 8.8% to A$0.52/Share by Jarden
(RBL) Redbubble Price Target Cut 30% to A$0.70/Share by Morgans
(RBL) Redbubble Price Target Cut 23% to A$1.15/Share by Canaccord Genuity
(TLX) Telix Pharmaceuticals Price Target Raised 7.3% to A$8.58/Share by Jarden
(WDS) Woodside Energy Price Target Cut 2.1% to A$33.00/Share by Jarden

Today's Agenda

Local: BusinessNZ manufacturing PMI December, NZ net migration November
Overseas data: Japan December CPI; Eurozone consumer confidence January; UK December retail sales, GfK consumer sentiment January; US existing home sales December

United States

James Gorman isn’t going to stay in Morgan Stanley’s top job for life. And he knows the three finalists who are competing to replace him.
“You plan a generation of people who can take over,” Gorman, 64, said in an interview Thursday with Bloomberg TV from Davos, Switzerland. “Ultimately the board will decide.”
Though he didn’t name his likely successors, Jonathan Pruzan’s announced exit will leave Ted Pick and Andy Saperstein, the New York-based firm’s co-presidents, in the running alongside investment-management chief Dan Simkowitz.


Ukraine wants to expand steel exports on top of a crucial grain-export agreement as a way to support economy battered by Russia’s war, Economy Minister Yuliia Svyrydenko told Bloomberg.
The cabinet minister called for building on the deal brokered last July by the United Nations and Turkey, which opened three Ukrainian Black Sea ports that had been blockaded by Russian forces for food exports to alleviate the global market.
“It’s essential for us to add more ports, to enlarge export volumes,” Svyrydenko said at the World Economic Forum in Davos, Switzerland earlier this week.
After the economy contracted by almost a third in the wake of the Russian invasion, gross domestic product could climb back as much as 3 per cent this year — if Russia pulls out and sea ports open, Svyrydenko said. The Economy Ministry says that figure may drop 0.4 per cent in 2023 if the war continues.


(All news & data sourced from AFR / The Australian / Bloomberg / Reuters / CNBC / Wall Street Journal / Morningstar / OPTO / Trading Economics)


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