Markets Live: Rally fizzles ahead of US earnings

Shares lost some of their early momentum today, but buying in the big four banks kept the market in the black, to cap off a week that saw the Australian dollar shoot to a 2017 high.

Dovish comments around rate rises from Federal Reserve chair Janet Yellen. who was reluctant to rock the boat for markets in her semi-annual congressional testimony, boosted Wall Street to record highs this week and the positive sentiment spilled over into other developed markets.

The benchmark S&P/ASX 200 Index and the broader All Ordinaries Index each closed up 0.5 per cent on Friday, and up 1.1 per cent over the week to close at 5765.1 points and 5808.7 points respectively.  

Australian markets have been more volatile in recent weeks, but this froth hasn't resulted in a trend higher or lower, said Fairmont Equities' managing director Michael Gable.

"The market has been remarkably range-bound in the past six to seven weeks," he said. "When you see that happen, it usually breaks out eventually with a powerful move, either up or down. 

"We don't know what way it'll go, but I think it'll probably be down, because the market was trending down before it entered this phase. 

"There are still trades to be made. But the index is being pushed around by the banks. And they're not going anywhere."

A bump in the oil price prompted energy stocks to enjoy solid buying support throughout the week, while profit taking in healthcare giant CSL, saw the heavyweight retreat 2.4 per cent over the week, weighing on the broader bourse. 

The big four offered the most support for the index, with Commonwealth Bank rising 1.2 per cent, Westpac closing 2.7 per cent higher, ANZ managing a 0.8 per cent bump and NAB up 1.2 per cent over the week. 

The spot price of gold was $US1218.22 an ounce on Friday, and Newcrest Mining, Australia's biggest gold producer, closed the week up 0.8 per cent. 

In other equities news, Slater & Gordon dropped 6.5 per cent on Friday, after investors scooped profits off a significant rally earlier in the week. The company announced it had agreed to a settlement with disgruntled shareholders and the stock finished the week 16.2 per cent higher at 0.08 cents.

Shares in mining services company WorleyParsons rocketed 6.9 per cent higher on Friday after Deutsche Bank upgraded their rating to "buy" and pointed to a $13.74 price target. 

It's been coming all day but it took the opening of London trade to push the Aussie dollar through its 2017 high.

A jump late in the local session took the Aussie to US77.59¢, its highest in eight months following five days of gains.

The jump in the currency followed comments earlier in the week by US Federal Reserve Chair Janet Yellen, who sounded less hawkish than some had feared while reinforcing her message of watching inflation "very carefully".

Her reluctance to rock the boat for markets paved the way for more carry trades, where investors borrow in low-yielding currencies to invest in higher-yielding assets such as the Aussie.

Oil prices have dipped, pulled down by high fuel inventories and improving industry efficiency, but are still on track for a solid weekly gain.

Brent crude futures, the international benchmark for oil prices, are down 0.2 per cent at $US48.33 a barrel, but up 3.5 per cent for the week.

Crude prices are around levels in late November last year, when a group of oilproducers including Russia and OPEC pledged to withhold around 1.8 million barrels per day (bpd) of output between January this year and March 2018 to tighten the market.

"OPEC compliance with production cuts slipped to 98 per cent in June, but more importantly output from exempt (from cutting) members Libya and Nigeria is currently about 700,000 bpd higher than at the time of the November OPEC agreement, offsetting about 60 per cent of the OPEC cuts. The growth in US production over the same time negates the remainder," US investment bank Jefferies said.

US oil production has risen by more than 10 per cent over the past year to 9.4 million bpd.

Oil analysts at research and brokerage firm Sanford C. Bernstein said that global oilstocks remain high.

"For the first half of 2017, OECD inventories are likely to finish higher, rather than lower ... The most plausible explanation is that OPEC compliance has been not as high as has been suggested," Bernstein said.

"OPEC will have to cut deeper and for longer if it wants to eliminate the inventory overhang and prices to rise," Bernstein said.

The head of global energy giant Santos says he is worried about sovereign risk and warned the Turnbull government that retrospective intervention in the gas sector could see Australian mimic Argentina in crippling its own gas industry.

And Kevin Gallagher told an audience in London that only in Australia does he encounter a backlash to gas as a source of energy, but conceded the business community needs to do more in contributing to the public debate to prevent the conversation and policy responses being dominated by the industry's critics.

Speaking on a panel for the Menzies Centre for Australian Studies at London's King's College alongside former Labor Resources Minister Martin Ferguson, Gallagher said: "I see the risk of retrospective government intervention as a massive sovereign risk for Australia. And he warned Australia is close to becoming known internationally as not just 'high cost' but also 'high risk'.

Last month Prime Minister Malcolm Turnbull slapped the gas sector with export controls effective from January 1, 2018 when Australia is poised to become the world's largest exporter of LNG.

On Friday, speaking ahead of a meeting of the federal and state energy ministers, the Prime Minister blamed export gas prices for the shortfall. 

Here's more

The ASX has trimmed earlier gains this afternoon, as investors take profits in some large caps, but is still on track for a solid weekly gain of 1 per cent.

Momentum in the local market has waned throughout this afternoon as investors are wary of the downside risk surrounding tonight's US earnings, said Gary Huxtable, client adviser at Atlantic Pacific Securities.

 "Given the US (markets) continues to form all-time highs, the market is vulnerable to a correction should tonight's numbers fail to meet expectations."

Major banks, including JPMorgan Chase, Citigroup and Wells Fargo, will report results tonight.

US bank shares have been among the winners on Wall Street this year in anticipation of strong earnings growth.

Investors are also awaiting a host of US economic indicators, including core inflation, retail sales and industrial production for June later in the session for more insight into how the Fed might proceed with monetary policy tightening this year.

"Market have struggled to get on board with one more rate hike though and (Fed chief Janet) Yellen's comments on Wednesday suggest Fed officials are not entirely convinced either," said OANDA analyst Craig Erlam.

"Weakness in the data today will only fuel these concerns, particularly with regards to inflation which has remained stubbornly low throughout the tightening process so far."

Will future historians blame Janet Yellen's extreme caution for the next massive market meltdown? the AFR's Karen Maley asks:

Champagne corks have been popping on Wall Street after Yellen, the head of the US Federal Reserve, told US lawmakers on Wednesday night that she was not locked into a set timetable for tightening policy, and that she would defer interest rate hikes if US inflation remained stubbornly low.

She tried to finesse her message in her testimony to the US Senate Banking Committee on Thursday night by emphasising that she expected US inflation to pick up, due to the strong US labour market and rising prices for imported goods.

But it was too late. The bulls were already running, with the Dow Jones Industrial Average hitting its 24th record high so far this year in trading overnight.

Bullish investors see Yellen's comments as confirmation the Fed planned to keep doing what it's done for close to a decade now – that is, to use aggressive monetary stimulus to bolster an anemic economic recovery. The combination of ultra-low interest rates and massive liquidity has been responsible for pushing global equity markets to dizzy heights.

Meanwhile, rueful bears scrambled to join the rally, while kicking themselves for believing the Fed and other major central banks when they warned the era of extremely easy monetary policy was coming to an end.

Now, it's not as though Yellen – whose every utterance is closely scrutinised by investors worldwide – didn't expect her comments to act like a shot of adrenaline for global equity markets. She's been in the top job long enough to appreciate the power her words have.

And it's not as though her comments were a slip of the tongue – she is, after all, someone who is so meticulous that she turns up at policy meetings with carefully crafted, pre-prepared statements.

It's that Yellen is so doggedly determined to fulfil the Fed's dual mandate – its mission to achieve maximum employment and stable prices – that she's prepared to prolong the era of ultra-low interest rates until the US inflation rate edges up towards the Fed's 2 per cent target.

In doing so, Yellen is ignoring the increasing number of warnings – including from her deputy Stanley Fischer and from her close ally, William Dudley, who runs the New York Fed – that worrying signs of recklessness are emerging in financial markets, as investors bet that low interest rates and plentiful liquidity will continue indefinitely.

Here's the whole article at AFR

The Australian dollar is hovering at four-month highs, on track for its best weekly performance since mid-March, boosted by carry trades as risk-on sentiment dominated globally.

The Aussie breached stiff chart resistance of US77.12¢ overnight and climbed as high as US77.46¢ this morning, just below its 2017 high of US77.50¢ it scaled in March. For the week, the currency is up 1.7 per cent.

Traders will keenly watch US inflation data overnight, which is likely to determine the US dollar's near-term direction.

The jump in the Aussie this week follows comments by US Federal Reserve Chair Janet Yellen, who sounded less hawkish than some had feared while reinforcing her message of watching inflation "very carefully".

Her reluctance to rock the boat for markets paved the way for more carry trades, where investors borrow in low-yielding currencies to invest in higher-yielding assets such as the Aussie.

"The clear driver has been super low implied volatility, a general ill-will towards holding US dollar, renewed outperformance of emerging markets of which the Aussie dollar is a proxy in G10 forex circles and with this the propensity to desire to pick up yield or 'carry'," Chris Weston, Melbourne-based chief market strategist, IG Markets, said in a note.

Weston added that the Reserve Bank was powerless to cap gains in the Aussie unless it shifted to an explicit easing bias and led the market to believe the next move in interest rates is down, not up.

This would be difficult, given the global tide has turned towards tightening. Markets are also betting the next move will be up, with a hike of 25 basis points almost fully priced in by August 2018.

This week Australia's two main sentiment indicators, the NAB business survey as well as Westpac's consumer confidence, showed the gap between mood in the corporate world and among households is increasing.

While rising profits have made firms increasingly optimistic, subdued wage growth is keeping households pessimistic.

Such a divergence is rare, Capital Economics says. It expects this gap to narrow in the coming months - but only because business confidence looks likely to fall as consumer confidence remains subdued. 

The current low level of consumer confidence is at odds with the recent strength of its underlying drivers, economist Kate Hickie says.

"In particular, job growth has been strong and petrol prices have been falling. But it appears that other factors, such as record high household debt and the prospect of surging utility bills, are exerting more influence."

With these drivers set to persist, confidence is likely to remain subdued, he says.

"With retail energy prices rising by as much as 20 per cent, households are set to face significantly higher utility bills in the coming months."

At its current level, consumer confidence is consistent with a slowdown in real consumption growth to around 2.0 per cent by the end of this year, Hickie adds.

"Given that confidence tends to lead spending by around half-a-year, if confidence stay subdued in the coming months that means that consumer spending is likely to remain subdued into 2018 as well."

In contrast, business confidence has been propped up by rising corporate profits, but with firms facing increasing energy costs too, we doubt business confidence will continue to rise. 

This in turn would prevent a predicted robust pick-up in business investment.

"We expect that the annual rate of real GDP growth will slow from an average of 2.5 per cent in 2016, to no higher than 2.2 per cent in 2017," Hickie says.

Talking about ultra-accomodative rates around the world and who's ready to hike, here's a good overview:

Global Central Bank Update: Canada hikes rates for the first time in 7 years, a 25 bps move to 0.75%. pic.twitter.com/C3t3V1vt7q

There is little doubt the RBA is behind the curve on tightening monetary policy, given rate changes today take another one to two years to have their full effect, the AFR's Chris Joye writes:

The RBA's super-stimulatory monetary policy settings have bequeathed Australian families with an unprecedented 190.4 per cent household debt-to-income ratio; the most expensive house prices in history (the median Sydney house price is now $1,050,000); and an off-the-charts leap in the nation's house price-to-income ratio to 6.5 times, which according to UBS is uncharted territory.

For years the RBA's financial (in)stability department has erroneously alleged that there was nothing to worry about here while we repeatedly warned them of these outcomes. The unanticipated consequences of this policy failing are sundry.

For now let's focus on superannuation and the possibility it could be woefully inadequate for many savers' retirement income needs given an unexpected increase in their future living costs.

When former Treasurer Paul Keating introduced compulsory superannuation in 1992 the household debt-to-income ratio was just 73 per cent, the median Sydney house price was $161,000, and UBS's house price-to-income ratio was merely three times. All these metrics have sadly multiplied in the years since.

Crucially, about eight in 10 of the retirees Keating was targeting in 1992 owned their homes outright with no outstanding mortgage debt.

Fast forward to 2017 and affordability problems have pushed the home ownership rate down with many Australians suffering from "financial repression". This refers to the process by which artificially cheap money transfers wealth from savers to borrowers (and hence renters to owner-occupiers). More than 30 per cent of all families now rent with many left with little choice but to do so for the remainder of their lives.

Australian families are also entering their twilight years with more mortgage debt than ever before. RBA data shows that whereas households aged 55 years and over had debt-to-income ratios less than 50 per cent as recently as 2002, today this number is converging on 100 per cent.

Many retirees will arrive in their late 60s and 70s with debt-servicing obligations for years to come. Those who rent will grapple with a similar fate insofar as their monthly living costs will be heftier than the debt-free owner-occupied dream they once envisioned.

Here's more

Following the Bank of Canada's rate rise this week - somewhat unthinkable just two months ago - it's worth asking if the RBA's cash rate is too low.

The two economies are frequently compared, not least due to their dependency on commodity exports (even though Canada focuses on oil, while Australia's biggest export is iron ore).

Deutsche economist Adam Boyton reckons it's worth looking at the main trading partners for some guidance, and in this case the gap between Chinese and US growth.

"The current 75 basis point gap between the RBA cash rate and the BoC's overnight rate is not particularly out of line with the respective pace of GDP growth in China and the United States," he says.

It's more likely the period of RBA policy rates being a long way above Canadian rates is over on account of the moderation of growth in China and ongoing growth in the US.

Meanwhile, domestic conditions also suggest the current rate difference is about right, Boyton continues, looking at the respective unemployment rates (see chart).

He concedes that an aggressive rate hike cycle from the BoC while the RBA remains firmly on hold would be "stretching things somewhat".

"That said, another 25bp hike from the BoC in October would not leave us thinking that the RBA's cash rate looked 'too low' relative to that in Canada."

Coles has been urged to freshen up its marketing and loyalty programs, with analysts saying price reductions alone won't help Australia's second largest food retailer regain momentum from Woolworths.

Coles cut the shelf price of about 30 bread varieties and baked goods by as much as 35 per cent on Wednesday in an attempt to improve its price competitiveness with Woolworths and build its leadership reputation in fresh food.

However, in a move that escalated fears of a full-blown price war, Woolworths responded within hours, reducing prices to match or undercut those at Coles.

Deutsche Bank analyst Michael Simotas said Coles' price cuts were the highest-profile price investments for some time, but did not constitute strong price leadership and were unlikely to be enough to regain the value perception advantage Coles had lost to Woolworths over the last year.

"The prices have not been dropped materially below those of Woolworths – in some cases they are slightly lower and in other cases they remain higher," Simotas said.

As part of its "everyday value" strategy, Coles has "permanently" reduced shelf prices on about 4100 products to build customer trust and insists its prices are still cheaper than Woolworths.

However, Deutsche said Coles' focus had been on staples such as bread, milk, eggs and roast chickens, where demand does not usually rise in response to lower prices.

"Overall, we believe Woolworths has continued to gain momentum relative to Coles," Simotas said in a research note.

"[Woolworths] is enjoying the benefits of stronger supplier support and improving customer perception which is enabling it to regain some of its lost market share."

Singapore's economy grew in the second quarter, narrowly dodging a recession thanks mainly to robust growth in its electronics and precision engineering industries due to strong global demand for semiconductors and semiconductor manufacturing equipment.

The economy expanded at 0.4 per cent in the April-June period from the previous three months on an annualised basis, lower than predicted. The economy contracted by 1.9 per cent in January-March, weakening more than the earlier estimate of a 1.3 percent contraction.

Gross domestic product grew 2.5 per cent in the second quarter from a year earlier, unchanged from a revised first quarter growth figure, and below forecasts of 2.8 per cent growth.

"The disappointment in the GDP data was predominantly in the manufacturing sector ... (which is)  at odds with the strength of the sector seen in other export oriented economies in the region," said ANZ chief economist Southeast Asia Sanjay Mathur.

Mathur said the current growth-inflation mix did not suggest any shift to the current neutral policy stance of the Monetary Authority of Singapore.

Singapore has been among a number of export-reliant Asian economies to benefit from a general uptick in global demand since late last year, enjoying strong sales of its tech products.

Japanese human resources giant Persol has made a $778 million takeover bid for labour hire and maintenance group Programmed Maintenance.

The $3.02 per share bid represents a 68 per cent premium to their $1.80 price before the securities were placed in a trading halt this morning.

The directors of Programmed have unanimously recommended shareholders accept the offer, which is subject to regulatory approval including from the Foreign Investment Review Board.

The Japanese takeover comes amid consolidation in the Australian services industry, with Downer EDI trying to secure full control of Spotless.

Persol is one of Japan's biggest staffing companies, with 32,000 employees. Its $5.7 billion market capitalisation dwarfs Programmed's market capitalisation of $463.5 million.

The European Central Bank is likely to signal in September that its bond-buying scheme will be gradually wound down next year and ECB chief Mario Draghi could give the next clue on the plans in late August, the Wall Street Journal says.

According to the paper, the European Central Bank will signal a tweak to its policy outlook at the September 7 meeting.

"This is another story that suggests the ECB is going to prepare markets in the autumn for a tapering," said Rabobank fixed income strategist Lyn Graham-Taylor.

"We still think this is more likely to come in October but the market is reading it as sign that QE is going to come to an end, and so pushing bond yields higher."

Bonds across the eurozone came under fresh selling pressure after the report, with German Bund yields coming off a one-week low hit earlier in the session and then turning higher on the day. Near the close, it was up 2 basis points to 0.53 per cent.

In Europe, expectations have ramped up that extraordinary monetary stimulus will end sooner rather than later, given impetus by a June 27 speech by ECB chief Mario Draghi in which he opened the door for policy tweaks.

This has prompted many investors to shed their holdings of eurozone government bonds, and yields have shot up in the past two weeks.

Draghi is scheduled to speak at the Federal Reserve's Jackson Hole symposium just two weeks before the ECB's September 7 meeting. He will be returning to the conference for the first time in three years, when he laid the foundations for the ECB's massive asset purchase program.

"The direction and timing of the communication would make sense to us," ABN Amro economist Nick Kounis said in a note.

"Indeed, our base case is that the ECB will announce a tapering of its asset purchases from January 2018 onwards at the September meeting. At the same time, we think the ECB will try to sweeten the pill by making tapering slow and signalling that rate hikes are a long way off."

David Jones' crucial like-for-like sales have fallen for the year with its parent company blaming the decline on weak consumer confidence in Australia.

Woolworths Holdings, the South African retailer that has owned the Australian department store chain for three years, says David Jones' comparable sales fell 0.7 per cent in the year to June 25. It is the first time full-year sales have dropped under the new owner.

"Whilst relevant market share has grown, sales growth slowed in the second half (at DJs), as falling consumer confidence resulted in lower footfall," the company said in a trading update.

David Jones' overall sales increased 1 per cent in Australian dollar terms, however the collapse of Dick Smith electronics concession stores last year has dented growth by about 1 per cent.

Woolworths Holdings' other Aussie retail business, the Country Road Group, suffered a 0.4 per cent drop in like-for-like sales while overall sales rose 5.1 per cent, in Australian dollar terms.

Bullish investors aren't ready to call it quits just yet, extending yesterday's rally as most sectors apart from telcos post gains.

The ASX is up 0.5 per cent at 5764.6 points, putting the market on track for a 1 per cent weekly gain.

It's the big banks doing most of the heavy lifting this morning after their US peers rose strongly overnight ahead of several majors posting quarterly earnings.

ANZ is up 1 per cent, NAB has risen 0.8 per cent and the other two have added 0.6 per cent.

BHP has hopped back above $25, rising another 0.3 per cent in what's been a bumper week for the Big Australian.

But other miners, including gold and coal miners are among the biggest drags on the index.

Whitehaven is down 2.4 per cent, South32 has lost 0.5 per cent and Newcrest has lost 1.5 per cent.

The US profit reporting season looks likely to be a key market driver over the next couple of weeks, says CMC chief market analyst Ric Spooner.

"Full valuations suggest that the market is yet again going into this reporting season anticipating results to outperform consensus analyst expectations," he says.

"Another good US profit reporting season will be very supportive for stock markets and continue the current bias against being too trigger happy in response to potential risk events. However, full valuations mean there's not a lot of margin for error."

It's steady as she goes, with no real moves in US equities, says IG strategist Chris Weston:

These limited moves are seemingly a reflection of low impact data releases (we have seen US PPI, weekly jobless claims and the monthly budget statement). Perhaps, also a reflection that in latter European trade when we get the June US CPI (ex-food and energy), in which the market expects stabilisation and an unchanged read of 1.7% yoy, or 0.2% mom.

While, as we know, the Federal Reserve prefer to focus on core PCE as their inflation input, the market is far more sensitive to CPI print, so the US session and also for Asia-based traders, today is just a day of pre-positioning in rates and USD positions and assessing the risk in the portfolio. Of course, second derivatives of these markets, such as gold and silver, will also be in play.

Recall, there have been three downside misses in a row in this data point, so a fourth would not be taken well at all. 'Real' (or inflation-adjusted bond yields) could have a sizeable drop, with traders suggesting there is an elevated chance of a turn in the Fed's language and more voters join Patrick Harker's camp and re-consider whether a December hike is such a good idea. Market pricing (in the fed funds future) on the probability of a December hike would drop from where it sits now at 50% to closer to 40%.

It will be interesting to see how influential a weak or somewhat stronger inflation read would be taken by equities, notably tech, where a move in bond yields should throw this sector around. So if running positions in the Nasdaq 100 this data point is an event risk.

One could suggest that Fed Chair Yellen's second testimony has reinforced this message of close inflation-watching, with mentions in the testimony of "we're watching inflation very carefully in light of low readings. I think it's premature to conclude that the underlying trend is falling well short of 2%". As many have rightly suggested, it's somewhat of a gamble reducing its balance sheet and hiking again in December to bring the 'real' fed funds rate towards the neutral real fed fund rate, if inflation then subsequently moves even lower.

With these dynamics in play, traders are also keeping a very beady eye on AUD/USD, although AUD/JPY trending nicely to the upside and we have seen EUR/AUD and GBP/AUD finding sellers too. However, it's AUD/USD which always gets the market's attention first and foremost and we can see price moving nicely into and through some very interesting levels.

One level to focus on is the 2016 downtrend at $US0.7720, where the pair has close the session above. A weak US CPI print could push the pair into 78c and we start considering the implication of a potential break above the 2016 high of $US0.7835.

Here's more

It would be "quite challenging" for the US to reach the 3 per cent growth target set by President Donald Trump, Federal Reserve Chair Janet Yellen told a Senate panel overnight in a hearing focused on regulatory reform and a discussion of lagging productivity.

Trump has pledged to boost annual growth to 3 per cent, the average for much of the last 70 years, and predicated an earlier tax plan on reaching that figure.

The Fed, the Congressional Budget Office and others are of the view that an aging population and lagging productivity mean the economy's potential has downshifted to around 2 per cent growth or less - a fact that has profound effects on national wealth as the slower pace compounds over time.

"I think it is something that would be wonderful if you could accomplish it," Yellen said at a Senate committee hearing. "I think it would be quite challenging," and require a broad set of changes from tax reform to an improved education system that adds to labour productivity.

Yellen's appearance before the Senate Committee on Banking, Housing and Urban Affairs covered much of the same ground as her session with a House committee on Wednesday where she said the Fed's plans for further gradual rate increases and a slow drawdown of its balance sheet remain on track.

She also indicated the Fed agreed with some of the suggested changes to the current bank regulatory system that congressional Republicans and the administration have advocated, such as easing the strict Volcker rule on bank securities trading, and limiting application of the most stringent regulations to only the very largest institutions.

However the Senate panel pressed her for ideas about boosting economic growth, asking whether Trump's goal is achievable, and whether things like tax reform in particular might help.

Yellen said she would not offer specific details on a topic that is Congress' prerogative. But she said there was "general agreement that there are distortions in the corporate tax code" that could be changed to improve productivity.

In general, she said that moving annual productivity growth back above two percent - about double the pace of recent years - would be a monumental task.

Here's the overview of how markets performed last night:

• SPI futures down 9 points or 0.2% to 5684
• AUD +0.7% to 77.34 US cents (Overnight: 0.7675 - 0.7740)
• On Wall St, Dow +0.1%, S&P 500 +0.2%, Nasdaq +0.2%
• In New York, BHP +0.4%, Rio -0.3%
• In Europe, Stoxx 50 +0.4%, FTSE -0.1%, CAC +0.3%, DAX +0.1%
• Spot gold -0.1% to $US1218.76 an ounce
• Brent crude +1.1% to $US48.24 a barrel
• Iron ore +2.9% to $US65.91 a tonne
• Dalian iron ore -1.8% to 479 yuan
• Steam coal +0.7% to $US83.80, Met coal -4.1% to $US164.00
• LME aluminium untraded, last bid +1.7% at $US1922.50 a tonne
• LME copper -0.5% to $US5875 a tonne
• 10-year bond yield: US 2.34%, Canada 1.91%, Germany 0.60%, Australia 2.68%