Good morning! Thursday. You can do it.
1. Amazon is on a retail recruitment drive in Melbourne. The company is hiring for a range of senior roles for a fulfillment centre in Dandenong South, with advertisements pointing out that the facility will be a “new site” and experience with Victorian workplace regulation would be preferable. The company is also recruiting for a range of corporate roles including PR and legal in Sydney. It’s happening.
2. It’s a busy day ahead in markets, with Australian jobs data out at 11.30am and the market expecting 15,000 jobs added across the economy last month. Your full preview is here. Central banks are squarely back at the core of market discussions at the moment and we’ve got the Bank of Japan’s monthly monetary policy decision this morning, followed by the ECB tonight. Federal treasurer Scott Morrison will deliver a speech today where he’ll talk about the brightening outlook for the Australian economy and try and rebut accusations that government spending growth isn’t restrained enough.
3. And the good news does seem to keep coming. Jobs website Seek says advertisements on its platform are soaring, lifting 10.9% in June from a year earlier. Most encouragingly, South Australia — where the unemployment rate is highest — has had the fastest increase, jumping by 18.7%.
4. The Australian dollar continues to rally , and is grinding its way towards US80c, and was trading at just over 0.69 against the Euro this morning. Iron ore’s rally has continued, and it’s back above $US70 (although futures are pointing lower this morning). The three major US stock indices all hit fresh record highs overnight and ASX futures are up a healthy 30 points ahead of the open.
5. There’s still a way it could all unravel for stocks, of course, and one scenario was outlined by $US30 billion hedge fund manager Baupost in a note to clients. Basically, the extremely low levels of volatility in stocks are an environment that encourages borrowing up to buy, and the more this continues, any increase in volatility is likely to feed on itself.
Baupost warns that “any spike in equity market realised volatility, even to historical average levels, has the potential to drive a significant amount of equity selling (much of it automated). Such selling would, in turn, further increase volatility which would call for more de-leveraging and yet more selling.” More on that here.
6. Australian bank share prices staged a big rally yesterday, with the majors up around 3% in trade yesterday after the prudential regulator APRA announced its long-awaited capital requirements guidance which were not as onerous as some thought they might be. “The four major Australian banks need to have CET1 capital ratios of at least 10.5% to meet the ‘unquestionably strong’ benchmark,” APRA said. It still means the big four will need to raise almost $8 billion in capital. This chart from UBS shows the breakdown:
7. Facebook will start letting publishers charge people to view stories. The company announced the addition of a paid news feature overnight and the share price edged higher.
8. Apple, meanwhile, is starting a journal where it will publish academic-style papers looking at new applications and techniques in artificial intelligence and machine learning.
9. Corporate war story of the day: Procter & Gamble had a problem with its soap bars being crushed by a marketing campaign from a competitor back in the 1970s. The full account is here, and explains that their winning response was driven by a three-word question formulation: “How might we…”. The kicker: Facebook and Google use this today.
10. Australia’s Michael Matthews has claimed the green jersey in the Tour de France. He pulled on the jersey, awarded to the best sprinter in the race, last night and is on track to win the points contest after the withdrawal of previous leader Marcel Kittel of Germany.
BONUS ITEM: The new British Airways safety video is packed with stars including Thandie Newton, Gordon Ramsay, Sir Ian McKellen, and Rowan Atkinson reprising Mr Bean. Rather excellent.
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