Markets Live: ASX higher despite pending trade war

The culture at Macquarie's stockbroking and financial advice arm was so fast and loose that Deloitte was compelled to sum it up in just three words. Freedom without boundaries.

The laissez faire approach to compliance had led to Macquarie Equities being slapped with an enforceable undertaking in January 2013, when the corporate watchdog outlined eight possible breaches of the Corporations Act, one possible breach of its financial services licence and would lead Macquarie to repay customers $24.7 million.

Faltering Chinese markets dented Asian stocks in a choppy on Friday morning, just hours before Washington is set to impose tariffs on Chinese imports that many investors fear might trigger a full-scale trade war in a blow to the global economy.

Around 0215 GMT, MSCI's broadest index of Asia-Pacific shares outside Japan was 0.3 per cent lower, pulling back from a modest early rise. The index has lost 8.8 per cent since June 7.

UBS economists have joined the list of analysts forecasting that the Reserve Bank of Australia will keep rates on hold until 2020.

UBS economists George Tharenou, Carlos Cacho and associate analyst Jim Xu say that lower underlying CPI and weaker housing means the RBA will keep rates on hold until 2020.

"The macro drivers are still sending mixed signals for inflation," they said in a note.

"Global CPI increased moderately further recently, albeit also boosted by oil. Domestically, jobs slowed after booming, but underemployment is still high & wages weak. Business conditions remain strong, but selling prices are remarkably low. An upside risk is the AUD TWI dropped a further 2½% q/q, & $A oil prices spiked 15%, but Q2 nominal retail sales ex food are modest so far, suggesting limited pass through.

"But key underlying CPI to slow to 0.4% q/q & 1.8% y/y; below the RBA's 2%

"But our survey shows key Q2 underlying CPI slowing to 0.4% q/q (was 0.5%), the equal lowest since 2016, & reversing Q1's uptick to 0.5%. This drags the y/y to 1.8%, the weakest in a year, below the RBA's 2% forecast, & missing their target for 9 out of 10 quarters. Overall, while higher oil & a lower AUD are an upside risk to (current & future) inflation, our expectation of low Q2 underlying CPI, weaker housing ahead, & the RBA's dovish shift on wages, means we now see the RBA to hold until 2020."

A senior ANZ Bank executive prepared a proposal to speed up the pace of branch closures from 50 planned closures in 2017, citing analysis it made more sense to shut a branch than sell it, the royal commission has been told.

As the commission looks at financial issues affecting remote Indigenous areas, documents tabled on Wednesday included a "accelerated branch closures presentation" from April of last year, which was prepared "for CEO discussion," and marked "for decision."

The sharemarket has found some traction in the last hour and enjoyed a strong advance.

The S&P/ASX 200 index is 31.9 points, or 0.5 per cent, higher at 6247.4.

A former Brumby's Bakeries franchise owner has accused the ex-chief executive of Retail Food Group, Tony Alford, of using him to hide loss-making stores and mislead the market.

Baden Burke, in a submission to a parliamentary inquiry into franchising, claimed he was befriended by Mr Alford and later used to hide stores that were losing money under a special management deal.

US President Donald Trump is firing the biggest shot yet in the global trade war by imposing tariffs on $US34 billion ($46 billion) of Chinese imports, delivering on a promise to his political supporters that risks provoking retaliation and harming the world economy.

The tariffs on Chinese goods will go forward just after midnight, Trump told reporters on Air Force One on Thursday.

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.

"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.

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.