Bunnings grilled at supermarket inquiry, ASX falls on geopolitical tensions — as it happened (2024)

• ASX 200: -0.5% to 7,752 points
• Australian dollar: +0.4% at 64.91 US cents
• Nikkei: -0.7% to 39,232 points
• Hang Seng: -0.6% to 16,620 points
• Shanghai: +0.8% to 3,043 points
• S&P 500 (Friday): -1.5% to 5,123 points
• Nasdaq (Friday): -1.6% to 16,175 points
• FTSE (Friday): +0.9% to 7,996 points
• EuroStoxx (Friday): +0.1% to 505 points
• Spot gold: +0.6% to $US2,357/ounce
• Brent crude: -0.5% to $US89.99/barrel
• Bitcoin: -1.4% to $US66,130

Price current around 4.30pm AEST

Live updates on the major ASX indices:

The escalating conflict in the Middle East saw markets in our region take a dive today, as (most) commodities were also sent lower.

The ASX 200 fell about half a per cent during the session: down 0.46% to 7,752 points.

Nine of the 11 sectors closer lower. Technology stocks lost 1.24%.

Though Basic Materials (miners) were the strongest sector, adding 0.73%, Energy stocks also rose, up 0.28% and Consumer Non-Cyclicals added a fraction, 0.06%.

In our region, Japan's Nikkei and Hong Kong's Hang Seng are down about three quarters of a per cent (see pinned post above).

Senior analyst at Swissquote Bank, Ipek Ozkardeskaya, noted Iran's weekend move into Israel weighed on commodities in this first day of trade since the drone attack.

"Oil traded slightly lower as the first reaction to the weekend news, while gold gapped higher at the open as last week's rising tensions left a sour taste in investors' mouth.

"Elsewhere, base metals including copper, iron and aluminum surged after the US and the UK decided to impose sanctions on Russian supplies.

"Spot aluminum jumped more than 5% while copper futures advanced to the highest levels since last summer.

"The dollar index consolidated on Monday after a 2% jump last week."

That's it for another day on the live markets blog.

It was a big day of news here and across the ABC.

Take care of yourselves.

Gosh it's been a big news day hasn't it.

No doubt you've also had your eye on our two other blogs today - the awful events at Bondi Junction and the Lehrmann defamation rulingthat saw Justice Michael Lee rule, on the balance of probabilities, Bruce Lehrmann raped Brittany Higgins at Parliament House in 2019.

Justice Lee today delivered that judgment in Mr Lehrmann's defamation case against Network Ten and journalist Lisa Wilkinson.

Those following the story will no doubt know about the interview Mr Lehrmann did with Channel Seven.

The Seven Group has faced a deepening reputational crisis about the lengths it is said to have gone to, to secure that interview on the program, Spotlight.

Tonight Kirsten Aiken will speak about this with governance expert from the Swinburne Law School, Helen Bird, on The Business.

Seven West'sshare price dropped2.6% today to 18.5 cents.

You can watch the interview on The Business tonight at 8.45pm AEST on the ABC News Channel, or after the late news on ABC TV.

It'll also be on iView.

Hi readers!

I'm jumping in to bring you the final numbers of trade today on the ASX.

It's just closed and as regular readers will know - that is actually a process that takes 20 minutes or so.

So I'll bring you the final numbers once they've settled.

But it looks like the ASX had ended the day down about 4 tenths of a per cent.

Back with more soon.

We're very sensitive to fuel prices because:

a) Commuters drive a lot in our sprawling cities that have vastly-fewer public transport options that similar metropolises worldwide

b) The price is on massive roadside illuminated billboards, which tends to focus the mind. We don't do this fluctuations in the price of bread or coffee.

The latest weekly data from the Australian Institute of Petroleum is out.

The average price of a litre of unleaded fuel, retail, is 200.2-cents. This is an almost 6-cent jump from last week.

I looked last week at why the price of fuel is going to keep climbing. It's complex and - apart from buying an EV (expensive) or massively changing your transport habits (not easy or an option for many) - people are kind of stuck.

The final set of questions is asked by senator Dean Smith, who asks about the active oversight that Bunnings management has when dealing with suppliers, and what the formal complaints process looks likes for unsatisfied suppliers.

Ms Gaspart responds first, saying oversight is reported to the "group risk" section of the business, which reports into the CEO and CFO, and monthly reports are provided on the "Team Utility" project.

Ms Rakers follows, and says its senior leadership team is "highly engaged" with suppliers "all the time".

"Many suppliers have regular contact with all levels of our senior leadership team," she says.

This question has come from senator Maria Kovacic (who has an angle grinder setting some hardware-esque ambiance in the background).

Ms Rakers says any request for price increases is driven by the suppliers in the "majority of cases", and suppliers are treated "individually and independently based on their costs".

Senator Kovacic asks Bunnings how it calculates its specials and whether it would support publishing how it decides on its specials for customers.

Ms Rakers replies that Bunnings is "everyday lowest prices, we don't do specials or high-low pricing, so the retail price that we put on a product is essentially set by the rest of the market".

"So it might vary in different regions or states depending upon where their price is, but we don't do any promotions," she says.

"We work on the products that are already arranged and moving in and out of seasons."

Senator Cadell has grown incredibly frustrated with the responses (or lack of) from Ms Gaspart and Ms Rakers.

"I have never heard anybody give less answers than you in the last half hour," he says.

He's asking the Bunnings executives to take the questions they are unable to answer on notice.

He then asks them whether Bunnings is making a higher margin on its greenlife products than on its big box products, to which the executives reply that they "don't have that information" in front of them, "however we are the lowest prices in the market".

Senator Cadell again cuts them off to deliver another zinger of a quote.

"The lowest prices are only the beginning, because the rest of the story is a bit of a horror story," he says.

"I look forward to getting those questions on that, thank you."

Questioning has moved onto senator Ross Cadell, who has just delivered that absolute zinger of a quote to the Bunnings executives.

He's asking these questions in response to Bunnings' earlier assertions that Bunnings should not be under the Food and Grocery Code of Conduct.

"So you say that you're a DIY big box store and the grocery code shouldn't apply," Senator Cadell says.

"What DIY am I doing if I buy Pedigree dog food?"

Ms Gaspert replies that Bunnings is responding to how its customers evolve.

"What DIY project am I doing if I buy Finish Quantum 60 pack dishwashing tablets?" a frustrated Senator Cadell asks.

Bunnings executives reply that the company has been supplying cleaning products for "quite some time" and they sell the products to commercial small businesses in "large pack format".

Independent Senator Tammy Tyrrell has asked Ms Gaspert and Ms Rakers why Michael Schneider, Bunnings CEO, is not appearing before the Senate inquiry when CEOs of other businesses and supermarkets have, or will be.

Ms Gaspert says she and Ms Rakers are "best placed" to front the committee.

"We work with our suppliers daily, we have interactions with them all the time and more clarity around how Bunnings actually does business with our suppliers," she says.

"OK," Senator Tyrrell responds.

"I don't agree, but thank you."

Two executives from Bunnings are currently appearing before the Senate committee examining supermarket prices:

• Laura Gaspert, Ethical Sourcing Manager
• Belinda Rakers, Category Manager

Although they are not a supermarket per se, Bunnings has been dragged into the inquiry after being accused of unfair market practices by plant suppliers.

Bunnings sells more greenlife products than any other retailer in Australia, and nurseries have accused the hardware chain of using trading practices similar to the major supermarkets.

What often happens, covering the share market like this, is that the biggest movers are teeny-tiny companies.

That's because government decisions, a single contract, a good result from a drilling site and things like that can change the trajectory of a company - and the value of a stock.

Today it's NZ-based medical device company Adherium, who produce a 'SmartInhaler' that has been approved for us in the US by the regulatory authority there.

Shares rocketed and then settled today.

They're are up +12.5% to 0.045 - yes we're talking almost half an actual cent - meaning the total company is theoretically worth $13.5-million.

The peak body representing tech businesses that work in the financial services sector is calling on the Federal Government to change policies that it says make it hard for the #fintech sector to raise cash.

(They call it capital. You and I probably call it investment. Let's, like iOS and Android, agree to not really work together efficiently on this).

In a pre-budget submission,FinTech Australia CEO Rehan D’Almeida calls for measures to boost the sector. (There's been a downturn in capital raising for the startup ecosystem as interest rates have risen, lifting the cost of money).

“Fintech has a key role to play in not only improving the financial literacy and prosperity of Australians, but also in our transition to a green economy. Maintaining the industry’s momentum is crucial in ensuring we see the most benefit from it as an agent of job creation and change.”

Some of the measures FinTech Australia want to see include:

• Expand the National Reconstruction Fund (NRF) initiatives to more clearly capture fintech businesses
• Fund the continuation of fintech trade and investment support
• Targeted incentives to promote the rollout of the Consumer Data Right
• A review and revitalisation of the Enhanced Regulatory Sandbox (ERS)
• Further funding and reinforcement of ASIC to handle an impending influx of licensing applications

Mr D'Almeidasays the latest State of Australian Startup Funding Report reported a -53% year-on-year decline in startup funding.

"The fintech industry has been particularly affected, with startup funding down to $331 million in 2023 from $2 billion in 2022 and $3 billion in 2021. As a result, we are also seeing far fewer young businesses and new innovative ideas coming through the pipeline and urgent action is required to increase the amount and diversity of funding available to startups and scaleups.”

Of the many changes happening at the Reserve Bank, one that might have slipped through is an explicit target for inflation: +2.5%.

This isn't the biggest shock, because the 'target band' was +2-3% and that is - yah - the middle. But it shows you what they want, and we all know the lever the RBA pulls when it wants something: interest rates.

ANZ senior economist Catherine Birch has released the bank's view of what our next inflation result will be.

She forecasts it to drop to +3.5% on a year-on-year basis (it's currently +4.1%).

"Our forecast appears broadly in line with the RBA’s February forecast for headline CPI but may be marginally higher than its forecast for trimmed mean. While the RBA has in the past shown little tolerance for inflation exceeding its forecasts (evident in the November 2023 cash rate hike), we do not think this will be enough for it to do an about-turn and consider a hike option at the May meeting, given the moderation in its policy stance".

The bank's economists think the central bank will hold rates steady until November.

Research firm SuperRatings were probably not intending to flame an inter-generational conflict, but its latest data on returns to super balances might just do that.

Young people contribute to superannuation, but they can't touch it until they hit 'preservation age' - between 55 and 60, depending on when you were born.

(Or when you reach age 65, even if you are still working, and under some special hardship circ*mstances).

The upshot is that it's being saved for you (young person) until you're older, but older people enjoy the fruits of it right now.

Up how much?

There was another month of investment gains in March, with SuperRatings estimating the median balanced option generated a return of +1.9% for the month.

"This takes the estimated return for the first 9 months of the financial year to +8.8%, making a double digit return a possibility depending on outcomes for the final quarter"

So at +8.8% and the possibility of +10% for the year, how does that compare to working and the cost of living?

Poorly.

The seasonally adjusted Wage Price Index (WPI) rose +0.9% for December quarter 2023 and +4.2% over the year.

The Consumer Price Index (or CPI) is an imperfect measure of inflation in the cost of goods, using a 'basket' of things people buy. It was +7% this time last year but has been falling.

Over the twelve months to the December 2023 quarter CPI rose +4.1%.

This means, in theory, that wages are lifting faster than the price of goods is going up. However the impact of rocketing mortgages (1/3 of Australians) soaring rents (another 1/3) means this isn't the best way to judge how the workerbees are faring.

Those who live off their super returns? Doing a lot better, in general.

Hundreds of workers at an electrical manufacturer in Adelaide are on strike, and one of the reasons it is notable is that it just doesn't happen that often anymore.

Check out this graph of industrial action over time. It's both the number of actions, the days 'lost' and the number of employees involved... all dropped off a cliff as changes to federal law made it harder and harder for workers to organise together and take action.

What workers want

Workers at Electrolux’s Dudley Park factory in Adelaide walked off the job this morning as the bargain for better wages and conditions. (They were out on Friday as well).

They want an 18% wage increase over three years after what the union representing them calls "several years of wage stagnation".

It says the current offer of an 11% wage rise over three years is less than the 14.5% over the same period offered to employees in other parts of the business. It would also give the company the power to set leave periods (sometimes called 'shutdowns').

The union claims Electrolux is the only home appliance company still manufacturing in Australia

“These workers stepped up during the COVID pandemic and were classified as essential workers, but their hard work and sacrifice have not been reflected in their wages," says Australian Manufacturing Workers’ Union SA Assistant State Secretary Stuart Gordon:

“Workers are just scraping above minimum wage. They can’t afford to walk off the job but they’re doing so anyway because, frankly, they’re on unliveable wages.

“Electrolux has offered workers at Dudley Park substantially less than a similar Electrolux warehouse doing the same work not even 5 kilometres away in Adelaide. It’s no wonder the workers are angry and feel disrespected".

“The factory’s workforce is culturally diverse, with many workers covered by the EA speaking Vietnamese as a first language. All the workers there take pride in their work and most are long-term Electrolux employees.”

Adelaide's local paper The Advertiser reports the company says it wants to resolve the dispute, quoting Electrolux Group spokesperson Mark Goodwin.

“The business areas and applicable wages vary dependant upon the nature of work being undertaken, so comparing the factory to the distribution centre is not a reasonable comparison.

“Although the impact to production is minimal given the small number of workers involved, our offer already tabled in November and March stands and we remain available to continue talks with the union at any time."

Sausage provider and hardware vendor Bunnings faces a parliamentary grilling today.

Read the shocking yarn from my colleague Emilia Terzon (below) to understand some of the big questions they're facing.

But the Senate Select Committee of Supermarket Prices is determined to keep the hard talk going, and tomorrow you'll head from the duopoly in our tight market:Coles andWoolworths.

Also scheduled to chat, former Trade Minister Craig Emerson, Food and Grocery Code Review Assistant Secretary Anna Barker and noted interesting thinker Associate Professor Andrew (Andy) Schmulow.

Big line-up!

Realistically, most people only examine foreign exchange rates when they're thinking about going overseas.

But shifts in the value of our dollar have huge implications for the costs of goods and services and our export/import trade.

They also shape behaviour: one of the reasons Japan has surged to be the top overseas holiday destination for Australians is the AUD has strengthened against the Yen.

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So here's some of the latests analysis from Westpac's economists, of what they think is going to happen.

AUDv USD- The big one.

"We see heightened risks AUD/USD tests its 2024 lows at 0.6443 this week, opening a run towards to 0.6340".

AUD v Euro

"AUD likely has a better time of its against the Europeans though, thanks to firming ECB June rate cut expectations and the ongoing industrial commodity price squeeze".

NZD- The team sees a brief spike on Wednesday it its "above-market forecast" for NZ Q1 CPI proves correct.

"The effect of that will be more obvious in AUD/NZD, which is poised to retest 1.0865 support". They think it will be 1.0700 in the coming weeks.

It's currently... $2.5-trillion.

(Yes these are US dollars, but there's a real dearth of local GIFs)