10 things you need to know this morning in Australia

Picture: Getty Images

Good morning.

1. Mega merger. Fairfax Media and Nine Entertainment announced yesterday that the two giant media companies were merging to create Australia’s largest integrated media player. The $4.2 billion combined business will be run by Hugh Marks, Nine’s CEO. Shares in Fairfax rose by more than 10% in morning trade following the announcement. At close, they were up just 8.4%. Here’s what a merged Nine and Fairfax will look like, and why the merger could disrupt digital media arriving in Australia in a big way.

2. The Australian dollar was hammered across the board on Thursday. For all the explanations offered, its sharp drop appears to have been influenced by renewed weakness in the Chinese yuan. As seen in the 30-minute chart below, the Aussie moved in lockstep with the offshore traded yuan which also weakened sharply during the session.

Thomson ReutersAUD/USD (yellow, LHS) vs USD/CNH (white, RHS, inverted). 30-Minute Chart.

The Chinese yuan will likely continue to influence the Aussie today. The main data highlight comes from the release of US Q2 GDP.

3. Holy moly. Facebook’s earnings disaster erased $163 billion in market value — the biggest wipeout in US stock-market history. And as you can see in the chart, it’s not particularly close.

7 26 18 biggest market cap drops COTDBusiness Insider/Joe Ciolli/Andy Kiersz, data from Bloomberg

4. Non-starter. The European Central Bank left monetary policy unchanged at its July meeting. This was widely expected, with most analysts forecasting little change in the last meeting before the central bank’s summer break. It also confirmed it plans to halt asset purchases at the end of this year. ECB President Mario Draghi added that market pricing for the next rate increase — currently forecast for the second half of next year — is well aligned with the central bank’s view.

5. Australia’s big banks could justifiably raise mortgage rates. That’s according to the Australian economics team at UBS, who say the recent combination of forces pushing up funding costs may represent a “structural change” in market pricing for the domestic market, and that a move by the big banks to offset those costs and raise rates is now “arguably justified”. Any additional rate rise would likely be in the vicinity of 10-15 basis points (0.10-0.15%).

6. Atlassian shares jumped 16% in after-hours trading after it revealed it has formed a new partnership with $US5 billion tech company Slack. As part of the deal, Atlassian has sold the IP to Stride and HipChat, its popular work chat tools, to Slack, along with making a small strategic investment in the company founded by Stuart Butterfield. It comes as the work chat space is under pressure from Microsoft, which is investing heavily in its competing Microsoft Teams.

7. So, it turns out Putin’s soccer ball gift to Donald Trump actually does have a transmitter chip in it. But unfortunately for all the would-be spooks and speculators online, the status over the ball at the White House is alert, but definitely not alarmed. Read more about it here.

8. The Big Four professional service firms in Australia — Deloitte, PwC, EY and KPMG — will later this year start recruiting for almost 3,000 graduate positions. The spots are highly sought after and can be the ultimate career starter. We asked the firms what they’re looking for in grads and for any tips they have that would make an applicant stand out. Find the answers here.

9. Chris Froome, four-time Tour de France winner, is having a bad time. The champ watched his bid for a fifth Tour title all but go up in smoke after he lost time on Stage 17 and then was crash-tackled by a policeman who mistook him for a fan.

The incident followed another mishap yesterday when Froome and other riders were inadvertently hit with pepper spray as police tried to deter local farmers protesting the race.

10. Get ready. The Blood Moon will arrive tomorrow. The Moon will appear to darken and gradually turn red as it moves into Earth’s shadow in the early hours of Saturday. The lunar eclipse will begin about 3.15am (AEST) Saturday, July 28 and start to turn red from about 5.30am. Unfortunately, if you’re on the east coast of Australia, you’ll only catch a snapshot of it.

BONUS ITEM: It’s the Business Insider Australia Devils and Details podcast! This week we’re joined by legendary hedge fund manager John Hempton of Bronte Capital, who recently closed his fund to new money after raising some $750 million. If you want first-hand insights from a legendary share market trader, this is a must-listen. It’s here on iTunes, under “Devils and Details” on your podcasting platform of choice, or you can listen in below.

Have a great day.

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