Live: Oil prices on the rise as energy supply concerns continue

Pinned

• ASX SPI 200 futures: +0.1% to 8,812 points
• Australian dollar: flat at 69.58 US cents
• Wall Street: S&P 500 -0.1%, Dow +0.4%, Nasdaq -0.4%
• Europe: Dax +0.8%, FTSE +1%, Eurostoxx50 +0.7%
• Spot gold: -0.5% to $US4,171/ounce
• Oil: Brent futures +1.2% to $US105.94/barrel, WTI futures +1.4% to $U93.10/barrel
• Iron ore: +0.1% to $US90.80/tonne
• Bitcoin: -0.2% to$US82,890
• 10-year bonds: US 5.24%, Australia 5.34%

Prices current at around 8:20am AEDT

Live updates on the major ASX indices:

The European Union has inked in a deal with China to limit the number of hybrid vehicles brought into the continent.

China's commerce ministry said on Monday local time a new European Union hybrid vehicle arrangement would ​allow continued export growth and ensure it a quota ‌no smaller than that of any other country, following "intensive consultations" between the two, Reuters reported.

The comments came after European Trade Commissioner Maros Sefcovic said on ​Friday that a China-EU deal reached after talks in Beijing ​could cut Chinese exports of hybrid cars to the ⁠bloc by more than half.

The deal "avoids an immediate escalation of the trade dispute between the two sides", said Angel Talavera, Chief Europe Economist at Oxford Economics.

“The agreement confirms our view that Europe will continue to try to find negotiated solutions where possible in order to avoid a full-blown trade war, while at same time considering an increasingly more powerful set of defensive measures to put pressure on China to tackle imbalances,” he said.

Key Event

More than 80% of home loans are now arranged through mortgage brokers.

ASIC's commissioner Alan Kirkland says that while mortgage brokers have existing processes to support acting in their customers’ best interests, the industry needs to do more to ensure those processes are delivered consistently for consumers.

"Where a broker recommends a loan that costs more than the available alternatives, consumers should be able to clearly understand why that recommendation delivers greater value for their circumstances," he says.

ASIC's review found that mortgage brokers’ practices generally aligned with its guidance, but also identified that brokers and aggregators could strengthen loan recommendation practices, supervision and complaints handling.

The review also found that complaints about the best interests duty took longer to resolve than other complaints.

"When customers raise concerns about a home loan recommendation, they should expect those concerns to be considered and resolved promptly," he says.

"Our review found complaints being missed, withdrawn without being fully investigated, or delayed. When complaints are not handled properly, confidence in the complaints process can be undermined."

The corporate regulator also highlights opportunities to improve the use of data to identify conduct risks and strengthen complaints handling and reporting practices under Regulatory Guide 271, Internal Dispute Resolution.

"Consumers rely on brokers to help them navigate a complex market and recommend products that meet their needs," says Mr Kirkland.

"Licensees should closely monitor recommendations made by brokers operating under their licence, particularly where a lower-cost loan is available.

"The greater the cost difference, the stronger the evidence needed to show the recommendation is in the consumer's best interests."

Here are some of the questions ASIC is encouraging consumers to ask of their mortgage brokers:

• Do you offer loans from a range of different lenders? What sort of lenders do you work with? What kind of lenders can't you access?
• How do you get paid for the advice you're giving me? Does this differ between lenders? 
• Why did you recommend this loan to me? Why is this loan in my best interests?
• What fees will I have to pay when taking out this loan? 
• What features (options) come with this loan? Can you show me how they work?
• How do the fees and features of this loan affect how much the loan will cost me?
• Can you show me a couple more options, including one with the lowest cost?
• What is the threshold for lender's mortgage insurance (LMI) and how can I avoid it?

Australia's national vacancy rate has risen and availability is higher than it was a year ago, suggesting a possible slowdown in the rental market.

The national residential vacancy rate increased to 1.4% last month, up from 1.3% in August, according to new figures from SQM Research released this morning.

The total number of residential vacancies rose to 42,290 dwellings, compared with 41,039 the previous month.

The rate was 1.2% this time last year, showing rental availability has increased and "suggesting a gradual easing" across parts of the country in welcome news for renters.

SQM Research managing director SQM Research "that divergence suggests rental pressures are beginning to ease, starting with the unit market".

The increase is most marked in Sydney, where vacancy rates rose to 1.8%, a significant jump from the same time a year ago when the rate was 1.3%.

Meanwhile Melbourne and Canberra are both sitting on vacancy rates of 1.9%.

However, elsewhere conditions remain stubbornly tight, with the capital cities everywhere else recording vacancies below 1%.

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A review by the corporate regulator into the mortgage broking industry found that nearly 90% of mortgage broker groups did not recommend the cheapest loan option in more than 20% of cases.

The new report by ASIC examined 13 credit licensees that make up eight large mortgage broker groups, reviewing how they ensure their credit representatives comply with the mortgage broker best interests duty and consumer complaints.

ASIC said that while there may be reasons to recommend a higher-cost loan, such as greater benefits from certain loan features, the corporate regulator found instances where brokers did not have clear evidence to support those recommendations.

The groups reviewed by ASIC include:

• Australian Finance Group Ltd 
• Connective Credit Services Pty Ltd 
• Finsure Finance & Insurance Pty Ltd and Beagle Finance Pty Ltd 
• Lendi Group Distribution Pty Ltd – part of the Lendi Group (Aussie)
• Loan Market Pty Ltd, LMG Broker Services Pty Ltd and BLSSA Pty Ltd – part of Loan Market Group 
• Mortgage Choice Pty Ltd and Smartline Operations Pty Ltd 
• Outsource Financial Pty Ltd 
• Yellow Brick Road Aggregation Pty Ltd (Vow Financial) and Yellow Brick Road Finance Pty Ltd (Yellow Brick Road)

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Telco giant Telstra is holding its annual general meeting today, where investors will get some facetime with executives and the board of directors.

The major speeches have been published to the ASX — Telstra chair Craig Dunn will be first up.

He said Telstra continued to focus on improving its network resilience, noting an improvement in the customer impact from major incidents and the time to restore services, saying "that's why the network outage on July 8 was so disappointing".

"We fell short of what people rightly expect from us, and it should not have happened," Dunn said in his AGM address.

"We acted immediately to address the issue, and we commissioned and published findings of an external expert investigation.

"We have accepted those findings, and we continue to act on them."

He said the board takes the outage "very seriously".

"The Board reflected the impact of the outage in the executive remuneration outcomes for FY26," Dunn said.

Shareholders will vote on whether to accept Telstra's remuneration report later today.

In August, the company cut executive bonuses, including that of CEO Vicki Brady, due to the July outage.

But Ms Brady's overall pay packet rose 11% to $6.8 million.

Shares of Webull on the US stock market dropped to a near-four-month low overnight after a US congressional panel said the online trading platform was "tied in structural ways" to the ​Chinese government.

Webull is an investment platform that lets retail investors trade financial markets and is available in Australia.

The US bipartisan House Select Committee on China said in a ‌report released on Wednesday, local time, that it found "a profound gap" between the company's public marketing and actual control, sending Webull's shares plummeting 19.1%.

"Webull has made ​every effort to cooperate with the Committee, but did not hear from them for more than 20 ​months before this report was released," a company spokesperson said.

"It is deeply disappointing that the Select ⁠Committee published a report containing significant inaccuracies and unsupported conclusions without ever seeking clarification from Webull," the spokesperson ​added, noting that the company stored US customer data in the US.

Ro Khanna, who is leading the ​committee, told investors to think twice when they chose to use the platform.

"Using technology providers in mainland China and an opaque China-linked ownership structure, Webull exposes its data to our foremost adversary. Investors should heed this information when choosing who they do business with," he said.

 - With Reuters

LVMH, the luxury fashion retailer behind Dior and Louis Vuitton, has posted lacklustre results overnight.

Overall sales in its leather and fashion arm fell 5% in its latest quarter, with the losses largely blamed on a massive slowdown in China.

The Paris-listed luxury parent company reported third-quarter sales just shy of €8.25 billion (A$13.23 billion) , down 5 per cent.

That fell below analysts' expectations for growth of 1.3%, according to a Visible Alpha consensus, and forecasts of €8.4 billion.

Controlled by France’s billionaire Arnault family, LVMH said its sluggish revenue growth reflected the “impact on business activity of a less buoyant environment in China”.

Meanwhile, the US, Europe and Japan reported “good growth”.

Adding to investor concerns, growth in LVMH's watches and jewellery division, home to brands including Bulgari and Tiffany, slowed to ​6% from 9% in the first half of the year.

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Australia may be good at innovation and invention (think wi-fi and over-the-horizon radar, along with a host of medical breakthroughs and advances), but as a nation we don't have a great track record in attracting investment to fund those brilliant ventures, writes our chief business correspondent Ian Verrender. Traditionally they've headed offshore.

Amidst the wreckage of last week's failed mega capital-raising by data centre provider Firmus Technologies was a creeping sense that, once again, we had somehow fallen short.

Perhaps there's a less philosophical and simpler explanation for the embarrassing failure to launch.

Big investors, including both domestic super funds and global hedge funds, baulked at the price and deemed the entire venture too risky.

The biggest selling point for the float was that some of the world's biggest investors, including American giant Blackstone, and industry titans like Nvidia, were on board, delivering credibility to the Australian-born Firmus.

That raises the question: was the Firmus float collapse a sign that the AI investment bubble is running short of fuel?

Read Ian's full analysis

US-based tech analyst Dan Ives, who you might be familiar with from his semi-regular appearances on The Business, is very excited by Meta's release of its latest Muse Wonder AI models.

Mark Zuckerberg says Wonder is a "frontier" AI model, competing with the likes of Claude and Chat GPT.

Ives writes, if it's performance is close to the frontier, then Meta has an enormous advantage over its key rivals.

"Meta's principal advantage is distribution, with ~3.6 billion people a day already live inside its family of apps, so a better model reaches users through the surfaces they already open rather than through a new app and a customer acquisition budget, and every additional surface, from WhatsApp to AI glasses, widens that funnel at little incremental cost," he observes.

"That advantage is already showing up as Muse reached the top of the App Store within two weeks of launch, ahead of ChatGPT, without a marketing push that any standalone AI lab would need to run."

He is also a fan of Meta's integrated business model, utilising its vast social media reach.

"We believe this is the right move for Meta as owning the model, the agent, and the distribution lets the company capture more of the value it creates, and memory and persistence are what turn an agent into a habit," he argues.

"The monetization layer is already forming, with Meta One past 15 million subscriptions and trials and the $20 and $100 Muse tiers in market.

"We continue to view Meta as a core name to own as the AI Revolution moves from models to agents, because a frontier model paired with 3.6 billion daily users is a combination few competitors can match."

Dan Ives is now with merchant bank Yorkville Ives, having left Wedbush Securities.

It must be noted that I struggle to recall a negative note I've read from Ives on the tech sector, so he is very much running with the bulls.

Although, as I am sure he'd point out, running with the bulls has been a very profitable strategy for the past four years!

Key Event

Oil prices climbed overnight as attacks on Saudi Arabia overshadowed hopes for supply improvements, and expectations for higher US interest rates to fight inflation drove the dollar higher on a narrowly mixed day for global stocks.

The action came after US President Donald Trump hailed fresh Russian diesel exports and a Russia-Ukraine energy ceasefire.

The greenback's rise in recent months has been driven in large part by expectations that high prices for energy and other goods will force the Federal Reserve to raise interest rates at a time when US growth is stronger than in other rich economies. This could expand the rate differentials that drive currency movements.

While the US bond market was closed for the Columbus Day holiday, investors were cautiously waiting for September inflation data and the third-quarter earnings season, which begins tomorrow with earnings from major US banks.

"There's a lot to be wary of," said Robert Pavlik, senior portfolio manager at Dakota Wealth Management.

"You're walking down a train line and you don't know, because it's dark, if a train is coming and so, you know, you're just being real careful right today."

Besides the wait for earnings and economic data, Pavlik noted that stocks were also "being kept in check because of higher oil" and a lack of direction from the bond market, which tends to influence stocks and other assets.

US Treasury yields hit 24-year highs this month as high energy costs fueled concerns that inflation could stay elevated, keeping policymakers hawkish and pressuring equity valuations.

In currencies, the US dollar held near an 18-month high, supported by safe-haven demand as an escalating Middle East conflict kept investors cautious ahead of the inflation data.

Markets imply only a 19% chance of a rate increase from the Federal Reserve this month, rising to a roughly 71% chance for a hike of 25 basis points in December, according to CME Group's FedWatch tool.

Investors are also betting on hikes in the EU, Japan and Britain before the end of the year.

Reuters

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Welcome to our live coverage of all things business this morning.

Business reporter Alex Turner-Cohen here to take you through all the day's highs and lows.

To start, the ASX is set to open higher, off the back of Wall St finishing with mixed results but overall remaining steady and hovering near its all-time high.

Meanwhile, escalating conflict in the Middle East has bumped up Australia's petrol prices to levels not seen for six months, surging past $2.40 a litre.

Grab a coffee and stay tuned for the day's updates.