$A firming, bonds cool after Syria strike

The Australian dollar is recovering from a sharp dive and bonds price are easing back from strong rallies as calm returns to markets following the US military missile strike on Syria.

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The local unit was sitting at 75.30 cents at 1530 AEDT on Friday, from 75.38 cents before the news broke at about 1100.

News of the attack shook the markets with traders selling off the risky Aussie and piling into safe-haven assets like bonds.

By 1211 the currency had plummeted to a one-month low of 75.17 US cents.

Westpac senior currency strategist Sean Callow said the market hadn’t expected the attack on a Syrian airbase as US President Donald Trump had been dining with Chinese President Xi-Jinping when it occurred.

“The markets weren’t ready for the dinner to be wrapped up quickly so the missiles could be fired,” he told AAP.

“The swing in Trump’s rhetoric (about Syria) wasn’t expected either.”

Meanwhile, local bond prices turned in the opposite direction, hitting their highest levels since rolling over in December.

By noon on Friday the June 2017 10-year bond futures contract had jumped to 97.445 (implying a yield of 2.555pct), while the June 2017 3-year bond futures contract was up at 98.210 (1.790pct).

However, the bond contracts had eased back to 97.430 and 98.190, respectively, by 1530 AEST.

National Australia Bank senior currency analyst Rodrigo Catril said the Australian dollar and bond prices would likely remain under pressure amid uncertainty about what President Trump’s plans are for Syria and more importantly how Syria’s ally Russia would respond to the attack.

“The best outcome for the Aussie right now is that Russia doesn’t step in,” Mr Catril said.

ThinkMarkets senior market analyst Matt Simpson noted that even before the attack the Aussie had been drifting lower amid investor concerns over the domestic economy, particularly the housing market, bank lending, high household debt and weak employment.

“The Australian Dollar has already been under broad pressure this week after their central bank (RBA) expressed further concerns over financial stability and weaker employment,” he said in a note.

Wave of attacks across southern Thailand after new constitution signed

Bomb blasts were among 23 coordinated attacks that rocked Muslim-majority southern Thailand early on Friday, a security officer said, just hours after King Maha Vajiralongkorn signed a new constitution as a step towards ending military rule.

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Police reported no casualties in the region, site of a recent upsurge in a decades-old Muslim separatist insurgency that had voted the most strongly against the new constitution at a referendum last year.

“The incidents are aimed to create disturbances,” Pramote Prom-in, a spokesman for regional security forces, told Reuters. “They want to destroy the government’s credibility and create fear among people.”

There was no immediate claim of responsibility and security forces said they could not yet identify which insurgent group was to blame.

The attacks were scattered across 19 districts in the southern region, grouping the provinces of Yala, Pattani and Narathiwat, and the nearby province of Songkhla, he said.

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A large number of co-ordinated attacks in the region is unusual. Complete details were not immediately available, but they ranged from bomb explosions at 52 electricity poles, triggering widespread regional power cuts, to several tyre-burning incidents, Pramote added.

On Thursday, Thailand’s king signed into law a military-backed constitution, an essential step towards an election the ruling junta has promised will restore democracy after the 12th successful coup in little over 80 years.

The new constitution is the Southeast Asian country’s 20th since the end of absolute monarchy in 1932, and critics say it will still give the generals a powerful say over Thai politics for years, if not decades.

Voters in the most heavily Muslim parts of Thailand were among the few to reject the draft constitution in last year’s referendum.

The timing of the attacks just hours after the constitution was proclaimed was curious, said Defence Minister Prawit Wongsuwan, but there was no conclusive evidence it was a motive.

A Malay Muslim separatist insurgency in the three southern provinces has killed more than 6,500 since it escalated in 2004, independent monitoring group Deep South Watch says.

On Monday, police reported what they called the biggest insurgent attack in the south in years, when about 30 people fired more than 500 shots into a police booth.

In February, the government of the Buddhist-majority country struck a deal with MARA Patani, an umbrella group that says it speaks for the insurgents, but other separatists rejected it. 

Watch: Thailand’s dangerous and divided south

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Trump, Xi begin key first talks in Florida

They are the leaders of the world’s two biggest economic powers, and they have sharply different visions and personalities.

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As United States president Donald Trump sat down for dinner with Chinese counterpart Xi Jinping, he told the waiting media it was the beginning of a special relationship.

“It’s an honour to have you in the United States. We’ve had a long discussion already. And, so far, I have gotten nothing, absolutely nothing. But we have developed a friendship, I can see that. And I think, long-term, we’re going to have a very, very great relationship, and I look very much forward to it.”

But just a few hours earlier aboard his Air Force One presidential plane, Mr Trump was more than a little less cordial in tone amid the static.

“We have been treated unfairly and have made terrible deals, trade deals, with China for many, many years. So that’s one of the things we’ll be talking about. The other thing, of course, is going to be North Korea. And, somehow, they will mix. They really do mix.”

It is being called the most consequential meeting of Donald Trump’s presidency so far.

Just a few kilometres away from his Mar-a-Lago resort in the state of Florida, where the talks are being held, Chinese imports continue to be unloaded from container ships.

But the amount of US goods going the other way is not anywhere near as much, prompting Mr Trump to threaten to introduce tariffs – which could spark a trade war.

The mayor of local Miami-Dade County, Carlos Gimenez, says that needs to be avoided.

“The President would like to see more of a balance in the exports and imports, but I don’t think we’re going to get into a trading war with China. Again, it would not be good for the United States, and it wouldn’t be good for China either.”

A director of the Washington-based research centre the Brookings Institution, Thomas Wright, says some members of the Trump administration have conflicting views about China.

He points, in particular, to Donald Trump’s chief strategist, Steve Bannon, and secretary of state Rex Tillerson.

“Steve Bannon, in particular, believes that China’s only succeeded economically at the expense of the United States, and President Trump has sort of said very similar things. And that view, and the idea that the US only really succeeds if China fails economically, is a pretty fringe view and, I think, would have grave consequences for the global economy and for the US economy. So that’s a risk. But Secretary Tillerson and some others are sort of making more of a case for engagement and a more traditional and balanced approach.”

It is an approach Mr Tillerson once again adopted ahead of President Xi’s arrival.

“Today will be a time to exchange candid views on the nature of the US-China relationship, and we look forward to additional discussions in the future on topics of mutual importance. As President Trump has said, the chief goal of our trade policies is the prosperity of the American worker. To that end, we will pursue economic engagement with China that prioritises the economic wellbeing of the American people.”

As for foreign policy, another pressing issue shared between China and the United States is the instability coming out of North Korea.

Mr Trump says China should be doing more to discourage Kim Jong-un’s nuclear program and has even threatened to deal with North Korea alone if he has to.

The Brookings Institution’s Johnathan Pollack warns that would not be a wise move.

“We’re going to do a lot better at it if we are doing this in conjunction with China and with the Republic of Korea than if we’re trying to do it separately.”

But Zhao Tong, from Beijing’s Carnegie-Tsinghua Centre, says he believes, while President Xi has little trust in Kim Jong-un, he has even less for President Trump.

“China believes that the US is using North Korea as an excuse to deploy aggressive, strategic military assets close to China and is using those military assets to contain China militarily.”

The official talks are set to begin later tonight.

 

Pint-sized Crow looms large for Port

Port Adelaide coach Ken Hinkley hasn’t had any volunteers to stand Adelaide dangerman Eddie Betts in their top of the ladder showdown on Saturday.

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“They’re not really queuing up for that job. I don’t blame them,” Hinkley told reporters on Friday.

The 172cm-tall Betts will be the smallest player on Adelaide Oval when the arch rivals meet but he looms largest in Hinkley’s pre-game plotting.

The brilliant Crows forward has revelled in Showdowns since crossing from Carlton – in six games against Port, he’s kicked 24 goals, only once being held to three or less majors.

Betts and his Adelaide attacking colleagues formed the highest-scoring side last season and have shown no signs of slowing down in two wins this season – the Crows recorded 147 points in round one and 113 last start.

“We have spent a lot of time thinking about Eddie … and Tex (Taylor Walker) and all the boys up there,” Hinkley said.

“They are a great forward line group. We know what we’re up against. We know how challenging it will be.”

Yet Hinkley resisted any temptation to summon experienced defenders Jasper Pittard and Nathan Krakouer for their first AFL games of the fresh season.

Instead, Hinkley recalled half-back Hamish Hartlett from illness to replace injured defender Jack Hombsch (knee).

“We have got great faith in the young blokes that have been out there playing at the moment,” Hinkley said.

“And we get to bring Hamish back in, a really important and experienced player.

“We are happy with the way that (defensive) group have been performing so we feel less disruption is best.”

US missiles hit Syria over Chemical attack

The United States has fired cruise missiles at a Syrian airbase from which it said a deadly chemical weapons attack had been launched this week, the first direct US assault on the government of Bashar al-Assad in six years of civil war.

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US President Donald Trump ordered the step his predecessor Barack Obama never took: directly targeting Assad’s military with air strikes in punishment for the chemical weapons attack, which killed at least 70 people, many of them children.

That catapulted the United States into a confrontation with Russia, which has military advisers on the ground assisting its close ally Assad.

“Years of previous attempts at changing Assad’s behaviour have all failed and failed very dramatically,” Trump said as he announced the attack from his Florida resort, Mar-a-Lago, where he was meeting Chinese President Xi Jinping.

“Even beautiful babies were cruelly murdered in this very barbaric attack,” he said of Tuesday’s chemical weapons strike, which Western countries blame on Assad’s forces. “No child of God should ever suffer such horror.”

The swift action is likely to be interpreted as a signal to Russia, and also to other countries such as North Korea, China and Iran where Trump has faced foreign policy tests early in his presidency.

The Syrian army said the US attack killed six people at its air base near the city of Homs. It called the attack “blatant aggression” and said it made the US a “partner” of “terrorist groups” including Islamic State. Homs Governor Talal Barazi told Reuters the death toll was seven.

A spokesman for Russian President Vladimir Putin said the strike had seriously damaged ties between Washington and Moscow. Putin, a staunch ally of Assad, regarded the US action as “aggression against a sovereign nation” on a “made-up pretext”, spokesman Dmitry Peskov said.

Russian television showed craters and rubble at the site of the airbase and said nine aircraft had been destroyed.

US officials said they had taken pains to ensure Russian troops were not killed, warning Russian forces in advance and avoiding striking parts of the base where Russians were present.

Western allies of the US spoke out in support of the decision to launch the strikes. Several countries said they were notified in advance, but none had been asked to take part.

US officials and allies described the attack as a one-off that would not lead to further escalation. It signalled Trump’s determination to take “decisive action”, US officials said.

For years, Washington has backed rebel groups fighting against Assad in a complex multi-sided civil war under way since 2011 that has killed more than 400,000 people. The war has driven half of Syrians from their homes, creating the world’s worst refugee crisis.

The United States has been conducting air strikes against Islamic State militants who control territory in eastern and northern Syria, and a small number of US troops are on the ground assisting anti-Islamic State militias. But until now, Washington has avoided direct confrontation with Assad.

Russia, meanwhile, joined the war on Assad’s behalf in 2015, action that decisively turned the momentum of the conflict in the Syrian government’s favour.

Department stores declining in US: Lowy

Department stores are in decline in the United States, shopping centre magnate Frank Lowy says, and his global Westfield chain is responding by shrinking their presence in many locations.

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Westfield Corporation has being buying back department store space in the US and replacing them with new and more “productive” retailers, the global retail giant’s chairman told shareholders in Sydney.

Mr Lowy, speaking at Westfield’s annual general meeting in Sydney, said the decline in US department stores has been happening since the mid-1980s.

“It is now generally accepted that retailers in the US, including the department stores, need less physical stores to service the markets in which they operate,” Mr Lowy said.

“Recognising this trend, in recent years we have bought back department store space and repurposed that space to introduce new and more productive retailers – retailers who have greater capacity to attract shoppers to our centres.”

Mr Lowy said it was the group’s expectation that this trend will continue in future years.

This comes at a time when department store giants Myer and David Jones are up against stiffer competition in Australia as online shopping grows and more overseas speciality retailers, including H&M, Sephora and Zara, open local stores.

Westfield, which is listed on the ASX and owns shopping centres in the US, UK and Europe, has been in the US since 1977.

Westfield shopping centres in Australia are owned by Scentre Group following a spin-off from Westfield Corporation in 2014.

Mr Lowy said department stores were closing in some locations while opening at Westfield’s flagship centres (centres with higher rent, higher occupancy rates and strong sales).

He said the US has too much retail space and this has put pressure on shopping centres which was why Westfield, since 2010, has been focusing on its flagship centres, which now represent 82 per cent of the group’s portfolio.

Nordstrom department store opened at the Century City centre in Los Angeles and another at in San Diego, while Bloomingdales opened a new store at Valley Fair in Silicon Valley.

France’s biggest department store, Galleries Lafayette, will open their first store in Italy at Westfield’s new centre in Milan, and John Lewis will have a new store at Westfield London.

Co-chief executive Steven Lowy said the group recently acquired a small Broadway production company to “create even better experiences in our centres.”

He said businesses that were never regarded as retailers were now opening stores in their centres, including car makers Ford, Citroen and Tesla.

SEEK to privatise China subsidiary Zhaopin

Job search group SEEK has finalised moves to privatise its successful Chinese jobs portal Zhaopin and delist it from the New York Stock Exchange.

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SEEK will partner with two China-focused private equity firms Hillhouse Capital Management and FountainVest Partners to acquire all outstanding shares of Zhaopin, which was floated on the NYSE in mid-2014.

The website is the largest and most popular Chinese jobs portal, with about 36.9 million job postings in the year to June, 2016.

Under the delisting, Seek and its private equity partners will by the outstanding Zhaophin shares for $US18.20 ($A24.14) in cash per American depositary share, or $US9.10 ($A12.07) per ordinary share.

The deal values Zhaopin at $US1.01 billion ($A1.34 billion).

SEEK, which currently owns 61.2 per cent of shares in Zhaopin, and 74.5 per cent of voting power, will retain its stake in the privatised business.

The offer price represents a 14.2 per cent premium to the closing price of the Zhaopin American Depositary Share on February 16, when the group first announced discussions around the potential deal.

The ADS last traded at $US17.74 on the NYSE on Thursday.

The agreement comes about 15 months after Zhaopin first received a proposal from a buyer group comprising of CDH V Management Company and Shanghai Goliath Investment Management.

A second proposal was received in May 2016 from a consortium comprising executives from Zhaopin and Sequoia China Investment Management.

The transaction is expected to be completed in the second half of 2017, SEEK said in a statement to the ASX on Friday.

At 1035 AEST, SEEK shares were up 1.2 per cent at $16.13 each.

Titans lose Proctor for Raiders NRL clash

The Gold Coast have been dealt a massive blow on the eve of their NRL game against Canberra, with co-captain Kevin Proctor ruled out with a hamstring injury.

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Proctor was injured in last Sunday’s 28-22 loss to the Warriors, however it’s understood it had a slow onset, and he was officially ruled out on Friday night.

At this stage Titans medical officials are unsure on a return date.

In a further blow to the injury-plagued Titans, he will be joined on the sidelines at Cbus Super Stadium by Joe Greenwood, who was expected to be Proctor’s starting replacement.

Greenwood has failed to overcome a concussion he sustained in last Sunday’s loss to the Warriors, with the club erring on the side of caution – it was his second head knock in a month.

“We decided that he does need a rest and that’s best for him,” Titans coach Neil Henry said of Greenwood.

“He has had a couple of head knocks within a short period so we felt it was best, and so did the medical team, that he has a week off with some modified training.”

It means Chris Grevsmuhl will be elevated to the starting side just a week after returning to the NRL.

But it will be the loss of Proctor the Titans will feel most.

Already without key players Jarryd Hayne, Nathan Peats and Tyrone Roberts, Proctor has averaged 26 tackles a match this year and has given much-needed stability on the right edge.

After making the finals for the first time in six seasons last year, the Titans have crashed to win just once in five rounds in 2017.

A further defeat on Saturday would leave them having to become the first team since Canterbury in 2013 to recover from a one and five start to make the finals.

They also enter Saturday’s game wary of a Canberra forward pack that will be desperate to take their team to back-to-back wins for the first time this season.

“Some of their forwards are the most dominant forwards in the game and we’re going to have to work up the middle,” Titans captain Ryan James said.

“Even their back rowers are huge and their bench is huge, so we’re going to have to do a good job on them.”

STATS THAT MATTER

* The Titans have won six of their last nine at Robina.

* Canberra are looking to avoid losing four consecutive away matches for the first time since 2014.

* Ash Taylor leads the NRL with most try assists (10) for 2017.