April 11, 2022

11 APR 2022 – Monday Market Highlights – Transcript

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Monday Market Highlights

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Will McVeagh
Good morning. It’s Monday, the 11th of April and I’m Will from Milford. The RBI released the monthly monetary policy statement last week. The key focus for the market was the removal of the word patient from the final paragraph of the statement, signaling that the central bank may be happy to raise rates sooner than previously thought. Governor Lowe also noted that over the coming months important additional evidence will be available to the RBA on both inflation and labor costs. This will focus on the inflation data in late April and wage data in mid May, which the market expects will lead the RBA to hike rates at the June meeting. Financial markets are pricing 180 basis points of rate hikes this year to see the cash rate at 2% by year end. The US Federal Reserve released the minutes of the match meeting on Thursday, announcing that they will look to sell up to $95 billion a month of the bond holdings. The minutes also noted that many officials would have opted for 50 basis point rate hike and match if not for the Russian invasion of Ukraine. US government bond yields so large moves higher again last week, driven by the Fed minutes and earlier comments from noted fed Lael Brainard, who said that inflation was much too high and they will need to reduce the balance sheet quicker than previous cycles. In China focus remains on the COVID situation we case numbers continue to rise rapidly. China has implemented extremely hard lock downs with all of Shanghai’s 25 million residents not able to leave their houses. China’s Sarah COVID policy now looks in debt with over 20,000 new tastes that day. However, this is complicated by low vaccination rates amongst the older population. markets continue to watch closely as lock downs are likely to affect activity, which could flow through to commodities like iron ore, as well as supply disruption to Chinese exports. Turning to stock news last week, western areas rejected IGS takeover bid following a large jump in nickel prices in recent weeks. An independent expert advice in western areas shareholders recommended that the transaction does not proceed at $3.36 as it is not in the best interests of shareholders. We will now wait to see if Arjo will increase the bid or walk away from the deal. Perpetual made a bit last week to merge with rival fund manager Pindell and a deal that could see the combined entity managing a mess of $242 billion. Under the terms perpetual would own approximately 52% of the merged company, with Pindell shareholders getting a 39% premium to the pre deal price and a cash in script deal. Pindell shares in the wake up 18% While perpetual shares were down 5% with farmers sold down his stake and Kohl’s virus trade with $500 million and a 1.8% discount on Tuesday night following previous sales in February and March 2020. The sleeves with farmers with an approximate 3% stake and Kohl’s with about $600 million. focus this week will be on the US we match inflation numbers due to be released on Tuesday night. The market expects year on year CPI to come in at 8.4% for 7.9% Previously, with monthly inflation rising to 1.2% from 0.8% and February. The UK will also announce their inflation prints for March with annualized inflation currently sitting at 6.2%. In Australia, the focus will be on Thursday’s employment print. With the unemployment rate currently sitting at multi decade lows of focusing. In New Zealand. The Reserve Bank will announce the interest rate decision where it is widely expected that they will increase interest rates by 25 basis points to 1.25%. However, some economists saying there is a chance of a 50 basis point hike at this meeting. Thanks for listening. Have a good week.

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