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Yield investors bank on banks while anxiety mounts over Telstra

ANZ has rounded out a solid; no surprises reporting season for the major banks with its quarterly report this morning.

Pressure on interest margins from higher funding costs and competitive pressure is weighing on the engine room of bank businesses and ANZ is no exception. It reported that Group Net Interest Margin declined “several basis points”.

However, this is being offset by improvements in other areas including lower expenses and favourable trading conditions in its Global Markets business. ANZ is also emerging as a winner in the competition for domestic clients which will be a plus for markets. It achieved market share gains in customer deposits and home lending

A soft lead from US markets and slightly weaker base metals prices suggest that the local market will take a wait and see attitude in early trade this morning. While bank results have been solid, Telstra’s declining margins have concerned investors and selling may have further to run, weighing on the ASX 200 today.

The pause in US markets and weaker US Dollar overnight coincide with the ASX 200 having arrived at the potential resistance of its January high around 5827. Traders might need a day of better news and international momentum to push the index emphatically through this level. 

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