Markets Overview

  • ASX SPI 200 futures little changed at 7,717.00
  • Dow Average up 0.1% to 38,776.63
  • Aussie down 0.2% to 0.6611 per US$
  • US 10-year yield rose 2.3bps to 4.0982%
  • Australia 3-year bond yield fell 1.9 bps to 3.59%
  • Australia 10-year bond yield fell 2.3 bps to 3.95%
  • Gold spot up 0.1% to $2,181.29
  • Brent futures up 0.4% to $82.41/bbl

Economic Events

  • 09:30: (AU) RBA’s Hunter-Panel Participation
  • 11:00: (AU) Australia to Sell A$150M 0.25% 2032 Inflation-Linked Bonds
  • 11:30: (AU) Feb. NAB Business Confidence, prior 1
  • 11:30: (AU) Feb. NAB Business Conditions, prior 6

Wall Street traders found little encouragement to keep pushing the stock market higher at the start of a week that will bring the last inflation figures before the next Federal Reserve decision.

Equities edged lower on Monday, with investors awaiting more clues on whether the recent uptick in consumer prices was just a blip or an indication that the disinflationary trend has hit a roadblock. After closing at record highs 16 times this year, the S&P 500 is showing signs of overheating, spurring warnings about a near-term consolidation.

The S&P 500 closed around 5,118. Treasuries fell, with traders bracing for another flurry of high-grade corporate debt sales.

US consumer expectations for inflation over the next three years climbed in February — and increased even more sharply for the five-year horizon, according to a Fed Bank of New York survey. Those figures came ahead of data expected to show inflation probably abated only gradually last month — illustrating why US officials are in no rush to cut rates.

A survey conducted by 22V Research shows 45% of investors expect the market reaction to Tuesday’s consumer price index will be “risk-off.” While most are still betting CPI is on a Fed-friendly glide path to 2%, the share of those who think financial conditions would need to tighten rose to 36% from 22%.

While the S&P 500 has fallen on just four CPI reporting days in the past 12 months, volatility is picking up in those sessions this year. Over the past six months, the equity gauge has moved about 0.8% in either direction on the day CPI has been released, according to data compiled by Bloomberg. That’s the most since April and up from less than 0.5% in September.

Other News

Rupert Murdoch’s News Corp. and the owner of the Daily Mail have held talks about a potential joint takeover of the Telegraph — one of the UK’s most famous newspapers — alongside the UAE-backed investment fund RedBird IMI, people familiar with the matter said.

A joint bid by the three would result in a smaller stake for Redbird IMI, which may ease concerns by British politicians over foreign state control of a legacy media outlet, said the people, who asked not to be identified discussing private talks. Representatives from the Daily Mail and General Trust — owner of the Daily Mail newspaper controlled by Jonathan Harmsworth — and News Corp.’s News UK unit have held back-channel conversations on how to form such a joint structure, they said.

The fate of the Telegraph’s ownership has been up in the air for months. RedBird IMI — a joint venture between a New York investment firm and a UAE-backed media investment vehicle — had agreed last year to provide loans of about £600 million ($750 million) to gain control of the Telegraph from the Barclay family. (The paper was seized from the family after they fell behind on debt payments.) But some UK lawmakers have raised concerns about foreign control of the outlet, UK probes have stalled the deal and meanwhile rival bidders have continued to circle.

DMGT, News UK and RedBird IMI declined to comment.

Redbird IMI, fronted by former CNN chief Jeff Zucker, has been approached by a number of parties interested in teaming up, but it’s still focused on buying the paper outright, one of the people familiar with the talks said. A fourth rival bidder, hedge fund manager Paul Marshall — the co-founder of Marshall Wace — may be excluded from the joint proposal, the people said. Marshall declined to comment.

The conversations began when RedBird IMI’s takeover of the Telegraph and Spectator publications came under fire by lawmakers in the UK’s governing Conservative Party, people familiar with the situation said. Sheikh Mansour, the deputy prime minister of the UAE, owns the majority of Redbird IMI, sparking concerns from ministers in Prime Minister Rishi Sunak’s cabinet about foreign state ownership, Bloomberg previously reported.

Sunak is due to decide in the coming days whether the government will propose an amendment to legislation in parliament that would make it harder for foreign states to take commercial interests in the British media industry. On Monday, the UK Competition and Markets Authority and and UK communications regulator Ofcom were due to submit the results of their own probes into the deal to Culture Secretary Lucy Frazer.

While a joint bid could ease concerns about the UAE’s involvement, it may raise new issues for media plurality and competition if Harmsworth and Murdoch took on more interest in UK news titles.

Under one scenario that has been discussed, RedBird IMI would take a stake as low as 25% in the Telegraph in an attempt to satisfy concerns about foreign state interference, the people familiar with the talks said, while cautioning that discussions are preliminary and it isn’t clear whether parties would reach a deal on a joint structure. DMGT and News UK have previously proposed a joint venture to combine their printing operations.

Meanwhile, opposition Labour leader Keir Starmer is concerned about foreign state ownership of British news outlets but is not at this stage actively opposing the Redbird IMI bid, a person familiar with his thinking said, contradicting a statement that Shadow Culture Secretary Thangam Debbonaire made this weekend about the Labour party’s plans to oppose the takeover.