MARKET TALK/AU-EQ: S&P/ASX 200 Could Fall 10 Points 07/12/03 09:12:00+
0912 [Dow Jones] Benchmark S&P/ASX 200 index likely trade lower this session, with futures market indicating 6 point fall while spreadbetting firm IG Index tips open at 3221 vs Friday close3229.8. Wall Street weaker Friday as jobless recovery theme continue with disappointing payrolls data. DJIA down 0.7%, Nasdaq falls 1.6%, FTSE 100 eases 0.3%. Local focus on RBA testimony which could dampen sentiment further on rate hike outlook, Virgin Blue (VBA) midday float to be outstanding PR success for Branson. (IGP)
0900 [Dow Jones] London funds manager Nicola Horlick may not join (AMP), U.K. Telegraph reports on weekend, conflicting with AMP confirmation in AFR's Rear Window. London paper says Horlick was to have started the GBP340,000 job in Sydney running AMP's fund management arm at start of 2004, but reasons for change of heart unclear. (AYC)
0851 [Dow Jones Australian government expected to upgrade its 2003-04 budget surplus forecast to A$5.0 billion from A$2.2 billion. Strong growth and rising tax receipts will swell fiscal coffers and set the scene for tax and spending initiative ahead of the next year's election. Government also expected to hike growth forecast to 3.5% from 3.25%. Markets not expected to react to report as fiscal settings have been off market radar for many years. Report expected to be released between 2300 GMT and 0100 GMT. (JEG)
0845 [Dow Jones Richard Branson's Virgin Blue (VBA) lists at midday; should hit boards well above A$2.25 offer price after A$600 million IPO was 10 times oversubscribed. Branson confirms he sold additional 4%, diluting stake to 25.1%. VBA is solid rival to Qantas (QAN), but with market cap 1/3 size of national carrier, some might ask if VBA is seriously overvalued. (RJN,IGP)
0810 [Dow Jones] RBA Governor Ian Macfarlane to defend recent rate hikes before parliamentary committee. Rates have been raised twice against backdrop of rising AUD and falling inflation rate. Some critics claim U.S. recovery has yet to gain traction. Domestic growth clearly strong while housing sector demand has refused to slow. RBA's view that trajectory' of inflation by mid-2005 will be worrying will also come under microscope. Rate hikes have attracted a lot of political criticism while exporters are concerned about rise of AUD/USD. Testimony begins 1100 a.m.. AUD/USD now 0.7367. (JEG)
0801 [Dow Jones] AUD/USD remains well supported near 6-year highs in early Monday trading. Sydney dealers says pair taking lead from weak USD, which ended Friday at multiyear lows against popular crosses. Upside risk remains for AUD/USD despite ongoing extremes of long speculative positioning. Focus on RBA Governor's testimony with upbeat take on economy expected to be delivered, carrying promise of more rate hikes. AUD/USD now 0.7366. (JEG)
