Markets Live: ASX climbs as banks edge higher

Some ideas never go away. So it is with the Phillips Curve. This week will see the most important meeting of the Federal Reserve's rate-setting committee in years, as its new and relatively unknown chairman Jay Powell takes the chair for the first time, writes the FT's John Authers.

He now becomes the latest and most critical voice in a debate over the relationship between unemployment and inflation that has now lasted more than half a century.

Unlike most other central banks, the Fed has a double mandate both to keep inflation in check and to ensure full employment.

The question Mr Powell must answer is whether persisting low unemployment in the US will lead to so much demand and successful pressure from workers for wage rises, that it pushes inflation up significantly from its current rate near the Fed's target of 2 per cent. If so, he has to map out a monetary policy strategy to deal with it.

There is almost no doubt that the Fed will raise rates this week. But predictions of future rates could be vital. In December, the median projection from Fed governors was for three rate rises this year; will this now rise to four?

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Federal Reserve Chairman Jerome Powell .
Photo: JACQUELYN MARTIN

The Australian Securities Exchange has tightened its listing rules to clamp down on companies over-hyping customer contracts and force the disclosure of past misconduct by directors, following scandals at Big Un and GetSwift that cost investors hundreds of millions of dollars.

The changes come after The Australian Financial Review investigations into technology companies Big Un and GetSwift revealed investors in the company were kept in the dark about facts that could be considered materially important.

In a compliance update dispatched late last week, the ASX firmed up its guidelines to stamp out the over-exaggeration of gains from customer contracts and also announced immediate changes to rules relating to disclosures of past misdemeanours of individuals seeking directorships or control of listed companies.

The exchange said it would crack down on companies that announce contracts with major global customers that lack details; that don't mention the contract is conditional or subject to a trial period; that include loosely derived revenue projections; that aren't updated if the contract is terminated; or are presented as material or with other "superlatives" when they are not.

Jonathan Shapiro reports

ASX chief executive Dominic Stevens.
Photo: David Moir

Australian shares gained in early trading on Monday, with financials notching mild gains and Woodside advancing after a rally in oil prices.

The S&P/ASX 200 index climbed 31 points, or 0.5 per cent, to 5981 while the All Ordinaries moved up 29 points, or 0.5 per cent, to 6084. The Australian dollar traded at US77.15¢.

Banks edged higher, with ANZ up 0.4 per cent. CBA up 0.6 per cent, NAB up 0.2 per cent and Westpac advancing by less than 0.1 per cent, with the sector facing another session of royal commission hearings today.

Woodside gained 1.3 per cent following a sharp jump in oil prices in US trading hours on Friday, with Brent crude futures jumping 1.7 per cent after US stock prices rose and investors covered short bets.

In the resources sector. diversified BHP climbed 0.9 per cent and peer RIo Tinto gained 0.7 per cent. Pure iron ore play Fortescue Metals declined 0.3 per cent and lithium producer Galaxy dropped 1.5 per cent.

Wesfarmers gave up some of Friday's strong gains, with a 0.9 per cent decline, while vitamin maker Blackmores fell 1.8 per cent.

Commonwealth Bank of Australia endured a torrid opening week of hearings at the Hayne royal commission and the financial giant's chief executive has warned staff it is not likely to get any better when the inquiry resumes on Monday morning.

CBA, along with the Australia and New Zealand Banking Group, is set to again have a starring role when the second week of hearings begins in Melbourne on Monday.

The commission is scheduled to hear from senior CBA retail bank executive Clive van Horen as well as a customer, Irene Savidis.

It is expected that the commission will examine credit card products including the credit card protection insurance. CBA pulled the plug on card protection insurance earlier this month.

Matt Comyn, who runs CBA's retail bank but is set to take over as chief executive from Ian Narev next month, wrote to staff on Friday to warn that this week the commission would highlight cases where "customers have been treated unfairly by us".

Mathew Dunckley and Sarah Danckert report

Lynda Harris of Aussie Home Loans fronted the commission last week.
Photo: Jason South

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Australian shares are poised to open firmer following a strong lead lead from Wall St on Friday, when the S&P 500 and the Dow Industrials rose as investors welcomed a 1.1 per cent jump in US industrial production.

This week, investors are braced for a the Federal Reserve to raise rates, with new Federal Reserve chairman Jerome Powell to chair his first meeting of the Federal Open Market Committee on Wednesday.

It's widely expected that he will pull the trigger on raising the benchmark overnight lending rate to a range of 1.5 per cent to 1.75 per cent.

Other key events happening this week are the nomination of a new chief of the Chinese central bank on Monday, five months after People's Bank of China governor Zhou Xiaochuan hinted he would step down after 15 years in the job.

On Tuesday, G-20 finance chiefs, including Treasurer Scott Morrison, will gather for the first time this year in Buenos Aires.

On Thursday, Bank of England officials are expected to lay the groundwork for an interest-rate increase in May.

The PBOC is set to name a new chief.
Photo: Mark Schiefelbein

All the key market action in numbers:

SPI futures up 27 points at 5969.
Brent crude up 1.7pc at $US66.21 a barrel
Iron ore was down 3.1pc at $US69.84 a tonne.
AUD trading at US77.20 cents.
On Wall St: the DJIA rose 0.3pc, the S&P500 gained 0.2pc and the Nasdaq was unchanged.
In Europe: Stoxx 50 rose 0.7pc, FTSE firmed 0.3pc, the CAC improved 0.3pc, and the DAX climbed 0.4pc.