Markets Live: ASX gives up gains as banks weigh

Commonwealth Bank shares dragged on the index, with the bank moving down 2.1 per cent, after telling shareholders that it will spin off its wealth management arm Colonial First State and its mortgage broking businesses, and may also sell its insurance arm.

CEO Matt Comyn also unveiled a new executive team, making six key appointments including a new head of retail banking and new chief risk officer.

Other banks were also lower, with NAB down 1.1 per cent, Westpac down 0.8 per cent and ANZ lower by 0.6 per cent.

The losses for the banks offset gains in energy sector which came after a surge in oil prices in New York on Friday, with BHP up 1.6 per cent, Woodside up 1.8 per cent. Origin Energy up 1.7 per cent and Oil Search up 2.5 per cent.

Credit Corp was another strong performer, as the firm's shares rallied 7.2 per cent after an upgrade to overweight at JPMorgan.

Westpac was finally getting ahead of the game on future potential regulatory change. It was considered by some as a tactical move that would also create problems for its competitors.

Westpac has spent a lot of money on its Panorama platform and would like nothing more than to have its competitors' customers defect to a platform that Westpac would like to think is superior and better value.

The corporate regulator has already made it clear it thinks grandfathered commissions should go. If it comes to pass, the implications will be profound, particularly for bigger players such as AMP, Commonwealth Bank and IOOF.

"If the argument is 'we can't raise rates because if we do we could make the housing market a lot worse', or prick some other asset bubble and cause a shock – if that's the problem – it's better to raise rates now than wait six months," he said.

The Weekend AFR provided this scene-setter based off the experiences of Rabobank borrowers Lloyd and Nolene Bradshow, describing how rural borrower accusations of wrongdoing are intertwined with upheaval in the rural economy over the past decade.

And when we get to the case studies, one of them will be Michael and Dimity Hirst, who began banking with specialist agri-lender Landmark in 2005 and subsequently ran into trouble, as we explained in this preview last week.

There's plenty of policy reform on the table for Commissioner Hayne to get his teeth stuck into, including a December report by the Senate Select Committee on Lending to Primary Production Customers.

Any reversal in our fortunes could be "quick and sharp", says the Bank for International Settlements, the global watchdog based in Switzerland and the scourge of dissolute practice.

The warnings cascade from the BIS's annual report released over the weekend, always a sobering read for investors and central bankers alike.

Governments are running low on monetary and fiscal ammunition needed to fight fresh shocks or to cope with recession.

An inflation surprise may lurk, risking a "snapback" in global bond yields and a horrid denouement for an investment universe built on assumptions of "lowflation" forever.

The rising US dollar threatens to set off a sudden liquidity squeeze and a rash of capital flight from emerging markets, now 60 per cent of the global economy and big enough to engulf the old world if unfolding events are mishandled.

Banks have higher capital ratios and are safer than in 2007 but the risk has rotated to pension funds, insurers and asset managers overseeing $US160 trillion of global wealth - including $US45 trillion of shadow banking - now clustered in "crowded trades" with narrow exits.

Any one of these scenarios could trigger a crisis. They might well combine. Global debt has risen from 179 per cent of GDP on the eve of the Lehman crisis to 217 per cent as emerging markets are sucked into the leverage sump.

Wall Street ended mostly higher on Friday, with a big lift in oil prices following an OPEC decision on production, helping energy firms to advance.

That positivity around energy stocks filtered through to the Australian market on Monday, with BHP up 1.6 per cent, Woodside up 1.8 per cent, Santos up 2.4 per cent and Origin Energy up 1.8 per cent.

Metcash shot up 6.8 per cent after the grocery wholesaler told shareholders that it will undertake a $125 million off-market share buyback.

CBA shares softened 0.6 per cent, however, after the banking giant told shareholders it will spin off its wealth management and mortgage broking business and may also sell off its general insurance business.

News of the spin-off came as chief executive Matt Comyn also announced six appointments and changes to his leadership team.

David Cohen has been appointed deputy chief executive, with Nigel Williams replacing him as chief risk officer; Angus Sullivan has been appointed group executive of retail banking services; Andrew Hinchliff has been appointed group executive of institutional banking and markets; Sian Lewis has been appointed group executive of human resources; and Pascal Boillat has been appointed chief information officer.

Metcash reported a bottomline loss of $149.5 million for the 12 months because of the impact of impairments of goodwill of $346 million on a post-tax basis, which had been previously announced. This compared with a net profit after tax of $171.9 million a year ago.

Total food sales at Metcash declined by 1.2 per cent to $8.9 billion, but liquor sales were up 5.7 per cent to $3.47 billion. Metcash chief executive Jeff Adams, a former Tesco executive who took the helm in December from Ian Morrice, said group earnings before interest and tax increased by 9.2 per cent to $332.7 million, mainly driven by earnings growth in the hardware operations following the acquisition of Home Timber and Hardware.

Metcash shares have dropped 24 per cent since late May in the wake of revelations that Drakes, a major South Australian independent supermarket chain, planned to move to a self-supply arrangement from mid-2019. The shares were at $3.68 on May 25 and are now at $2.79.

A dramatic surge in crude oil prices may send commodities-linked stocks higher after the opening bell on Monday, rekindling the rally.

The surge followed an OPEC+ decision to boost output by 1 million barrels per day, an effective increase of about 600k barrels since some members of the cartel-led producers' group are unable to shoulder their share of the increase in supply quota.

That disappointed markets looking for a more dramatic boost advocated by Russia and Saudi Arabia. Wall Street offered a preview of the impact, with energy and materials names adding 2.2 and 1.4 per cent respectively in Friday's session.

The Australian Dollar has managed a spirited recovery after touching a 13-month low against its US counterpart last week. Indeed, Friday marked the currency's largest one-day gain in three weeks. Still, the dominant trajectory continues to be defined by a series of lower highs and lows set from double top resistance established in late January, favoring a bearish bias.

He said "Trade must be fair and no longer a one way street!"

Trump already has strained relationships with North American and European allies by imposing tariffs on steel, aluminium and other products from those countries.

At the conclusion of a meeting of the world's leading economies last month, Trump told reporters that he had pressed for fair and reciprocal trade practices.

He said he had also urged his foreign counterparts to remove all tariffs, trade barriers and subsidies from their trading practices.

- AP