Markets Overview

  • ASX SPI 200 futures down 0.3% to 7,752.00
  • Dow Average up 0.1% to 38,834.86
  • Aussie up 0.2% to 0.6672 per US$
  • US 10-year yield little changed at 4.2227%
  • Australia 3-year bond yield rose 5 bps to 3.90%
  • Australia 10-year bond yield rose 2.6 bps to 4.18%
  • Gold spot little changed at $2,328.16
  • Brent futures down 0.3% to $85.07/bbl

Economic Events

  • 10:30: (AU) Australia to Sell A$1 Billion 112-Day Bills
  • 10:30: (AU) Australia to Sell A$1 Billion 84-Day Bills

Asian shares are set to track a drop in European equities in early Thursday trading as investors seek new catalysts after a holiday in the US.

Equity futures in Australia, Japan and Hong Kong all slipped, indicating lower openings for Asian benchmarks. Contracts for US stocks were little changed while the pan-European Stoxx 600 slipped 0.2% after two days of gains. Bond yields across Europe area edged higher.

Traders will now turn their attention to China’s one- and five-year loan prime rate fixing later Thursday, which are expected to remain unchanged for a fourth month after People’s Bank of China’s decision on Monday to hold its one-year rate. Still, a fragile recovery and anemic CPI inflation suggest the PBOC needs to ease further to stoke demand, according to Bloomberg Economics.

Other News

The owners of AirTrunk, an Australian data center operator, have lined up A$7 billion of financing from four banks for potential bidders to help fund offers for the company, people familiar with the matter said.

The financiers for what could be one of Asia Pacific’s biggest digital infrastructure deals this year are Credit Agricole SA, Deutsche Bank AG, HSBC Holdings Plc and Mitsubishi UFJ Financial Group Inc. The people asked not to be identified as the matter is private.

The staple financing — pre-arranged funding offered to potential bidders for an acquisition — underscores bank appetite to fund data centers as demand for cloud services grows. Asia is becoming the latest hot spot amid the artificial intelligence boom. KKR & Co. agreed to acquire a 20% stake in Singapore Telecommunications Ltd.’s regional data center business last year, while Blackstone Inc. announced the launch of its first wholly owned data center platform in Asia in 2022.

AirTrunk’s owners including Macquarie Asset Management Pty and PSP Investments could seek a valuation of about A$12 billion, Bloomberg News had reported in January. Macquarie Asset Management and PSP declined to comment when asked about the staple financing. AirTrunk didn’t respond to requests for comment.

The company runs data centers in Australia, Singapore, Hong Kong, Japan and Malaysia, according to its website. A group led by Macquarie’s infrastructure arm took control of the company in 2020 in a deal that valued it at about A$3 billion, Bloomberg reported at the time. Prior to that it was owned by investors including Goldman Sachs Group’s special situations division.

The data center company obtained a A$4.6 billion sustainability-linked loan in 2023 that attracted 40 lenders, the largest syndicated transaction in Australia that year.

The Australian Financial Review reported on the staple financing Monday.