0140 GMT - Mortgage credit in Australia remains stable despite higher rates, and commitments are picking up, say Citi analysts Brendan Sproules and Thomas Strong. "With mortgage activity accelerating and inflation strong, any desire by the RBA to cut rates may wane," they say in a note, adding that while banks benefit from higher house prices, "paradoxically, a strong housing market may ward off the rate cuts that the banks' share prices have been anticipating." Citi sees that this would potentially challenge the narrative that has driven the banks over the past six months, with the investment bank remaining negative on the Aussie bank sector. (alice.uribe@wsj.com)

0118 GMT - Market volatility is likely to remain heightened over the coming days, says Alex Cousley, investment strategist at Russell Investments. This is as investors digest Israel's stance in the Middle East conflict and any risks around further escalation of hostilities, Cousley tells Dow Jones Newswires. "Early indications are that Israel is taking a more measured approach, which could reduce some of the geopolitical risk premium if that is held over a couple of days. However, it remains fluid," Cousley says. If the conflict remains contained, but oil prices go higher, Australian equities are likely to outperform global, similar to what was seen during the early days of the Ukraine conflict, Cousley adds. Still, Cousley notes that "historically, equity market selloffs that have been driven by geopolitical events have tended to be fairly modest." (alice.uribe@wsj.com)

0030 GMT - Markets will enter the new week weighing the prospect of retaliation and escalation in Middle East tensions, says Taylor Nugent, National Australia Bank senior economist, markets. "Stock markets in Israel, Saudi Arabia and elsewhere in the Middle East fell on Sunday, but only slightly. There are only small moves so far in currency markets early Monday," Nugent says in a note. On Friday, building concerns of an Iranian attack on Israel saw a risk-off tone through markets, Nugent notes, adding that equities were lower, bonds were higher, and the U.S. dollar gained alongside the yen. The S&P 500 was 1.5% lower on Friday, and the VIX rose to its highest since October. (alice.uribe@wsj.com)

0015 GMT - The Australian market will likely shift toward safe-haven assets like bonds and gold amid an escalation of tensions in the Middle East, says Datt Capital CIO Emanuel Datt. He tells Dow Jones Newswires that Australia's S&P/ASX 200 will be softer today due to increased risk perception, anticipating a movement away from technology and other beta sectors like consumer discretionary, energy, financials and industrials. "Oil and gas will be fairly stable given Iran is a major player in this sector. We see potential upside there," says Datt. (alice.uribe@wsj.com)

0001 GMT - Australia's S&P/ASX 200's performance today will hinge on the investor's patience, says Bank of America. Phil Pineo, head of distribution at Bank of America in Australia tells Dow Jones Newswires "certainly, we do not expect a risk-on day in the market." Pineo sees that the key for the market today will be the "speed of the response and investor's patience to allow for a diplomatic solution from here on whether a sustained outperformance in the gold, oil and base metals stocks continues." He adds that whether there is a retracement in the AUD and the USD will also be of interest.(alice.uribe@wsj.com)

2357 GMT - Australia's S&P/ASX 200 could feel the impact of escalating tensions in the Middle East, says Jun Bei Liu, lead portfolio manager at Tribeca Investment Partners. Liu tells Dow Jones Newswires that she expects the equity market to take a small "hit to confidence," with some investors taking risk off the table. While Liu sees that geopolitical unrest usually has very short term impact on the share market, "this time will have some lingering impact as investors digest the consequence of higher oil prices." Tribeca expects oil prices and oil equities to be well supported by the market, as well as gold. "Healthcare and defensives are likely to be outperformers today also," Liu says.(alice.uribe@wsj.com)

2342 GMT - Markets in Asia may start off the week calmly, despite heightened tensions in the Middle East, says Morningstar chief investment officer, Asia Pacific Matt Wacher. "After a big sell off on Friday in the U.S. and the first down week for some time it seems that markets are going to look past the heightened tensions in the Middle East," he tells Dow Jones Newswires. Wacher sees that Israel and the U.S. are "demonstrating significant restraint" on the back of Iran's heavy missile strike on Israel Saturday. "Markets have been very volatile of late whipsawing around," he notes. (alice.uribe@wsj.com)

2317 GMT - Management at Domino's Pizza Enterprises recently flagged that its organic store growth target of 7%-9% will be difficult to achieve in FY 2025, and that it is turning its focus from store growth to improving profitability in certain markets. But this is raising alarm from Macquarie analysts, who point out that store openings have been a key growth driver for Domino's in the past. Macquarie figures that annual store growth is tracking at just 2.1% right now. Macquarie cuts its earnings forecast for Domino's by 3-5% over the next few years, driven in part by softer expectations for store rollout, though it retains a neutral rating. (mike.cherney@wsj.com; @Mike_Cherney)

(END) Dow Jones Newswires

April 15, 2024 01:00 ET (05:00 GMT)