Good morning, and welcome to Tuesday. Here’s what you need to know:
Europe stimulus. Unhappy Europeans voted heavily for parties skeptical of – or outright hostile to – the EU over the weekend. Immigration is a concern for many Europeans but it there’s also a lot of anger at the parlous state of the Eurozone economy. ECB president Mario Draghi said overnight that “more pre-emptive action may be warranted” to fight the threat of deflation, signalling that stimulus measures – including a possible negative interest rate for banks to encourage lending – are now a practical certainty. Markets across the EU rallied, with the DAX up 1.28%, Spain’s IBEX up 1.22% and Italian stocks exploding 3.61%.
Asia rally. The Nikkei continued its recent rally yesterday, up 0.97% to 14,603. The Hang Seng was unchanged and stocks in Shanghai were 0.32% higher. Despite the big rally in Europe the ASX futures contract is only up 7 points – highlighting just how much the local market takes its lead from the US, which was closed for Memorial Day. No big data today in the region.
Bond volatility. Graeme Jarvis, one of Westpac’s star analysts, has noted the divergence in bond markets between volumes in the core product – bonds themselves – and their derivative ETFs. He notes that while trade in bonds has fallen 6%, activity on ETFs has increased 18%. Jarvis notes that this doesn’t really “tick the box” of a “healthy solid market”, and that it could be pointing to an explosion in volatility later this year.
Million-dollar dump. This house in Sydney’s inner-west, on 278 square metres, sold at the weekend for $980,000. Surely this is the top, right?
Financial advice showdown. The head of Australia’s financial system inquiry, David Murray, looks set for a showdown with the country’s financial advice industry over standards and education. The AFR reports members of the inquiry are concerned about the lack of training and the absence of professional bodies that monitor the quality of advisors and what they’re telling their clients.
The smart home. Apple is getting ready for a June launch of its “Smart Home” software, which turns your iPhone into a remote control for everything in your house. It will compete with existing products from Samsung and follows Google’s $US3.2 billion acquisition of Nest Labs, which makes internet-connected thermostats and smoke alarms. One feature, according a report in the FT, will be lights automatically switching on when you enter the house with your iPhone on you.
Co-founder fired. Mahmoud Moghadam, the co-founder of US startup Rap Genius – which allows users to annotate rap lyrics – has left the company. It emerged that he annotated the text of the bizarre 141-page manifesto of Elliott Rodger, the 22-year-old who went on a shooting spree in Santa Barbara, California, at the weekend, killing six people and then turning the gun on himself.
Manufactured life. Australian scientists have joined a global project to create the world’s first synthetic organism – a yeast. The Aussies will work on making one of the organism’s 16 chromosomes. The goal is to create a “better yeast” with vast applications in medicine and food production. It could also eventually produce better wine and beer.
“The” for sale. A scrap of paper with the word “The” written on it, which we covered yesterday morning, was removed from sale by eBay yesterday after bids reached more than $40,000. However, it has been re-listed as of last night and bids are sitting at the knock-down price of $100. (Now there’s value!) Half of the proceeds will go to the Cancer Council.
Socceroos send-off. Australia drew 1-1 with South Africa in a warm-up game ahead of the World Cup which starts on June 12 in Brazil (June 13 in Australia). Australia struggled to break through against the second-string South Africa side, a reminder of what a tough assignment Australia face in the first round of the World cup. The travelling squad is named today.
Bonus item: This DJ remixed iPhone ringtones into a dance track. Enjoy:
Have a cracking day. I’m on Twitter: @colgo
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