LA Private

ASX down 0.01% at noon: Bond yields slightly higher

At noon, the S&P/ASX 200 is 0.01 per cent lower at 7,303.00.

Bond yields rose slightly, indicating a higher probability of an August interest rate hike by the RBA.

The odds of a rate increase in August now stand at 40%, up from 36% on Friday. The market is also pricing in a 65% chance of an increase by September, with a full rate hike expected in November.

The market’s expectation for the peak cash rate is around 4.4%, suggesting at least one more increase by the RBA. However, previous expectations of two rate rises have diminished. The Australian three-year bond rate increased by 3 basis points to 3.92%, while the 10-year rate rose by 5 basis points to 3.97%.

The SPI futures are pointing to a fall of 2 points.

Best and worst performers

The best-performing sector is Health Care, up 0.89 per cent. The worst-performing sector is Consumer Staples, down 0.85 per cent.

The best-performing large cap is Medibank Private (ASX:MPL), trading 3.58 per cent higher at $3.47. It is followed by shares in Yancoal Australia (ASX:YAL) and Whitehaven Coal (ASX:WHC).

The worst-performing large cap is Endeavour Group (ASX:EDV), trading 10.54 per cent lower at $5.60. It is followed by shares in IGO (ASX:IGO) and Liontown Resources (ASX:LTR).

Asian markets

Asia-Pacific markets fell on Monday as investors look ahead to key economic data out of China, including gross domestic product figures for the second quarter and industrial output numbers for June.

Last week, a Reuters poll said that while GDP is expected to grow 7.3% year on year, this is off a low base, and ”[recovery] momentum is rapidly faltering, raising expectations Beijing will have to roll out more stimulus measures soon.”

Hong Kong markets will likely be closed all Monday due to a warning issued for Typhoon Talim. The Hong Kong Observatory expects storm signal No. 8 to remain in force until at least 4pm. The Hong Kong Exchange usually cancels the morning trading sessions if the typhoon signal is No. 8 or above, and all trading sessions for the day will be cancelled if signal No. 8 or above remains in force by noon.

Elsewhere, Japan’s markets are closed for Marine Day.

South Korea’s Kospi dipped 0.43%, ahead of the release of its trade figures for June.

In Southeast Asia, Singapore released its non-oil domestic export numbers for June, while more trade data will be released from Indonesia later.

Company news

The Calmer Co. International (ASX:CCO) announced a record Q4 sales figure, up 80% compared to the Q3. This is largely due to deals with CJ Patel, RooLife and Amazon USA. Shares are trading 33.3 per cent higher at 0.4 cents at noon.

DroneShield (ASX:DRO) has received a record $33 million order from a U.S. Government agency. The award consists of DroneShield equipment and multi-year services. Shares are trading 30.2 per cent higher at 34.5 cents at noon.

Sovereign Metals (ASX:SVM) announced that Rio Tinto (ASX:RIO) is set to invest $40.1 million and become a 15% strategic investor. Chairman Ben Stoikovich commented: “The experience and expertise that Rio Tinto brings will truly set Kasiya apart as a potentially globally significant supply of two critical minerals and take us all a step closer to supply chain decarbonisation.”

Commodities and the dollar

Gold is trading at US$1957.50 an ounce.
Iron ore is 3.6 per cent higher at US$115.80 a tonne.
One Australian dollar is buying 68.22 US cents.