Markets Live: ASX muted at the opening

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10:59am

The borrowing capacity of Australian property investors has contracted 20 per cent over the past three years, leading UBS to forecast that major banks' housing credit growth will fall to zero by 2019-20, in line with the further rationing of credit to come.

Borrowing capacity could shrink by 30 per cent if the royal commission recommends a "more strict" responsible lending regime where banks actually have to verify living expenses using applicants' transaction records.

"We estimate that we are [one-third] of the way through the credit-tightening process for owner-occupiers and most of the way through for investors," UBS lead banks analyst Jonathan Mott writes in new research. For many investors with multiple investment properties, limits on "very high debt-to-income" not just serviceability will be the most significant constraint.

Vesna Poljak has the full story here.

10:38am

"I don't think we're doing enough on social media."

The stern words from 99-year-old John Johnston are still ringing in the ears of Godfreys chief executive John Hardy after a four-hour meeting with the new owner of the battling 200-store retail chain at his retirement unit in a leafy inner south-east suburb of Adelaide.

Mr Johnston, who turns 100 in late July, has twice been involved in a buyout of the business which he first joined as a partner in 1936.

Godfreys will stop trading on the ASX at Friday's close, marking an awkward chapter after almost four years as a listed company. Mr Johnston's Arcade Finance vehicle has acquired Godfreys for just $13.5 million after it lost its way this time around – a far cry from the high hopes of early 2015 when its share price had soared to $3.58 and the business had a sharemarket value of $148 million. The vacuum cleaner joined the ASX in late 2014 with an issue price of $2.75.

Simon Evans has the full story here.

10:28am

The Australian sharemarket has opened moderately higher and it looks like it's going to be a very muted session today.

The S&P/ASX 200 index is up 7.8 points, or 0.1 per cent, at 6223.3 with no stock inside the benchmark index moving more than 3 per cent this morning.

BHP Billiton in leading the index with a 1 per cent gain following by the four major banks along with Telstra, South32, Rio Tinto and BlueScope Steel.

St Barbara is leading the index gains wth a 2.7 per cent advance. Nine Entertainment is up 2 per cent.

CSL is weighing the index alongside Woodside Petroleum while Aristocrat Leisure is also dragging.

Ingham's has recorded the biggest fall on the index, down 2.8 per cent while Beach Energy is down 2.7 per cent.

10:02am

SPONSORED POST

Australian shares are poised to lift at the open, with SPI futures up 29 points near 6.35am AEST. The Australian dollar is steady, write Kyle Rodda & Timothy Moore.

US President Donald Trump is preparing to impose tariffs one minute after midnight (Washington time) on Friday, with China set to match the move as the two economic powerhouses step closer to a trade war that could derail global growth.

Read the full 8@eight here.

9:41am

Here are the overnight market highlights:

SPI futures up 28 points or 0.5% to 6195 near 7.45am AEST

AUD +0.1% to 73.85 US cents

On Wall St: Dow +0.8% S&P 500 +0.9% Nasdaq +1.1%

In New York, BHP flat Rio +0.5% Atlassian +0.7%

In Europe: Stoxx 50 +0.9% FTSE +0.4% CAC +0.9% DAX +1.2%

Spot gold +0.1% to $US1256.45 an ounce at 1.53pm New York time

Brent crude -0.4% to $US77.94 a barrel

US oil -1.3% to $US73.16 a barrel

Iron ore -1.7% to $US63.14 a tonne

Dalian iron ore +0.7% to 459 yuan

LME aluminium -0.5% to $US2079 a tonne

LME copper -0.6% to $US6345 a tonne

2-year yield: US 2.55% Australia 2.01%

5-year yield: US 2.73% Australia 2.23%

10-year yield: US 2.83% Australia 2.59% Germany 0.29%

9:19am

Leaving interest rates too low for too long could lead to a surge in inflation that forces central banks into dramatic rate hikes, slamming the global economy into recession, warns an influential group of monetary policy experts headed by Australia's Philip Lowe.

The scenario, which involves rate increases of almost 300 basis points, are among several crises that could be triggered by the failure of policymakers to unwind the ultra-low, ultra-easy monetary policies of recent years, according to a Bank for International Settlements study.

In Australia, economic growth would collapse to around 0.5 per cent a year – compared to the long-run average of 3 per cent, with mortgage rates surging well above 5 per cent.

Jacob Greber has the full story here.

9:02am

Good morning and welcome to the Markets Live blog for Friday.

Your editor today is William McInnes.

This blog is not intended as investment advice.

Fairfax Media with wires.