US President Donald Trump's currency manipulation complaints are having a subtle, and sometimes not-so-subtle, impact in the language and behaviour of some of America's major trading partners.

While Japanese policy makers initially pushed back against Trump's charges, the nation's finance minister last week signalled there should be limits to the yen's slide.

German Chancellor Angela Merkel acknowledged a "valuation problem" in the euro, though stressed it was beyond her influence.

In Taiwan and South Korea, where officials customarily intervene for what they deem smoothing operations, there's speculation central banks have reined in dollar buying.

The shifts have occurred during a period of a softening US dollar, but they're also in the run-up to a Group of 20 finance chiefs' gathering next month that could potentially be a forum for a clash. Looming as well is the semiannual US Treasury report on trading partners' currency practices, due in April.

"The willingness of the USA to label countries as currency manipulators has taken currency intervention off the table for many," said Sean Keane, an Auckland-based analyst at Triple T Consulting and the former head of Asia-Pacific rates trading at Credit Suisse.

That's a far cry from the global drumbeat for much of the past decade, when country after country took action - verbal and otherwise - against currencies that soared after the US Federal Reserve unleashed quantitative easing amid the 2008 financial crisis.

So what's changed? The Trump administration's loud concerns that the greenback is now the one suffering from economic growth-sapping strength look to be playing a role - along with disappointment at a lack of US fiscal stimulus action to date.

"The strongest currencies in this part of the world in the past week or so have been the likes of Taiwan, South Korea - which does perhaps suggest a heightened sensitivity to anything that could be construed as currency manipulation," said Ray Attrill, global co-head of foreign exchange at NAB.

Even so, Attrill suspects any shift that has occurred won't be enough to sway the Trump administration. "If the US is going to label anyone a currency manipulator in the near term, I struggle to believe that the last few weeks or so is going to count for anything."

The bottom line, according to Paul Bednarczyk, managing director of G10 rates and foreign exchange at 4CAST-RGE: "whether by accident or design, the clues are there; some noted adherents to soft currency policies have changed to at least some degree since November's US election."

The Reserve Bank expects rising business investment to add to economic growth by the end of 2018.

With mining investment falling in recent years as major projects have come online, subdued non-mining business investment has failed to fill the gap.

But the RBA says non-mining business investment jumped 5 per cent in the year to the end of September 2016, led by NSW and Victoria, and recent data shows a solid rise in non- residential building approvals, suggesting it will contribute to economic growth.

The central bank said in minutes of this month's policy meeting that consumption growth would also pick up from a lull in mid-2016 while remaining constrained by low wage growth.

"The higher terms of trade represented a boost to national income, which provided some upside risks to the domestic forecasts," the Reserve Bank said. It reiterated GDP growth was predicted to accelerate to 3 per cent later in 2017 and "remain above estimates of potential growth over the rest of the forecast period."

While there are signs of global reflation elsewhere, the return of consumer-price growth to the RBA's 2 per cent to 3 per cent is forecast to take some time, as wages growth remains low.

"The recent pick-up in global inflationary pressures could flow through to domestic inflation by more than expected," the central bank added.

A report from S&P's has confirmed what most industry observers already knew, that 2016 was a debacle for Australian fund managers with the majority of equity and bond funds getting trounced by the benchmark.

Analysis of more than 1000 local funds from the ratings agency and index compiler said the sub par result from active fund managers was the worst performance since the report was first published in 2009.

The report should make for uncomfortable reading by fund managers and investors alike which shows that less than one-quarter of active Australian large cap equity funds outperformed their relevant benchmarks in 2016 – or down slightly on 2015.

In 2016, the S&P/ASX 200 gained 11.8 per cent, while the Australian large-cap equity funds posted an average return of 9.2 per cent, with 76 per cent of funds underperforming the index.

Over three and five years the percentage of funds that outperformed the benchmark rose to around one-third but over 10 years the number of outperformers fell back to just under one-quarter of all active large cap equity funds.

Small and mid cap funds – which traditionally outfperform the index – have also had trouble delivering over the short term with one fifth of the funds surveyed beating their respective benchmarks over calendar 2016 and one third of funds performing over three years.

When viewed over longer time periods however the small and mid cap managers did better, with a little over half beating the index over five years and close to two thirds outperforming over ten years.

The worst performing of all fund managers however were international equity funds, a sector Australian investors have only recently begun to embrace. Over the periods of one, three, five and 10 years the number of funds which outperformed thier respective benchmarks oscillated between one-tenth and one twentieth of all funds surveyed.

 

Scentre Group, the owner of Westfield in Australia and New Zealand, recorded a 10.4 per cent rise in full-year profit to $2.99 billion including $1.6 billion in revaluations driven by the strong property market.

The company said revaluations reflected net operating income growth throughout the portfolio, the value creation from the completion of major redevelopments and the continued improvement in capitalisation rates.

Funds from operations of $1.238 billion represented 23.3¢ per security up 3.2 per cent and distribution of 21.3¢ per security up 2 per cent.

The capitalisation rate of the portfolio tightened 24 basis points to 5.33 per cent, reflecting the strong conditions in the commercial property market.

Scentre Group chief executive Peter Allen said the portfolio now had 16 of the top performing 25 shopping centres by sales and that company was not feeling the pain of struggling retailers.

"The group continues to improve the retail product offering by introducing more relevant, on-trend and desirable retailers. These retailers continue to drive demand for retail space across the Scentre Group portfolio which remains more than 99.5 per cent leased," Mr Allen said.

The leasing spreads, the difference in rent between old and new lease agreements, showed two distinct movements with new rents for existing tenants rising 4 per cent while new rents for new retailers dropping 3.8 per cent.

Mr Allen said this trend was likely to continue.

"We always have a watch list - in terms of payment performance. When we see issues we act fast. We replace those retailers who are poorly performing."

Mr Allen said that watch list was now stronger and that Scentre was also just as keenly looking at the future of new retailers.

Scentre also announced two new redevelopments including Westfield Carousel in Perth and Westfield Plenty Valley in Victoria.

The $350 million project at Westfield Carousel will comprise the introduction of a David Jones department store.

Scentre shares are 0.1 per cent higher at $4.51.

Resurgent exports could push the Aussie dollar to US80¢ and even beyond, Deutsche Bank chief economist Adam Boyton reckons.

A shrinking current-account deficit, which has been driven by a surge in commodity prices, means Australia now only needs about a third of the capital it required a year ago to cover the shortfall, says Boyton.

The relative appeal of Australian bonds - seen in the difference between commonwealth and US yields - suggests that capital will keep coming in. Any inflows surplus to the current-account's smaller requirements will put upward pressure on the currency, which has surged 6.5 per cent this year. 

``In essence we are comparing export-driven movements in the current account deficit to interest rate differentials; arguing that an export-driven narrower current account, for any given interest rate differential, should see a higher Australian dollar," Boyton said in a research note.

``Our construction is not only highly correlated with the Australian dollar, but in fact tends to lead movements in the currency."

The current account deficit narrowed to 1.5 per cent of gross domestic product last quarter from 5.5 per cent a year earlier, Boyton estimates, and he expects further improvement in the first three months of this year. A narrowing of that scale normally comes when the domestic economy is moribund and demand for imports collapses; but this time it's the result of surging prices for iron ore and coal.

Deutsche estimates exports as a share of GDP were 21.2 per cent in the fourth quarter of last year, and will climb to about 22 per cent in the first three months of this year. The jump ``combined with the prevailing interest-rate differential suggests risk of further upside in the Australian dollar toward and indeed above 80 US cents," said Boyton.

He doubts the Australian dollar will make it all the way to the mid-80s against the US dollar. Such a strong appreciation would likely wind up hurting the domestic economy and require the Reserve Bank to cut interest rates in response, impacting yields.

RBA governor Philip Lowe earlier this month signalled a level of comfort with the currency. Given the RBA is forecasting a 3 per cent expansion, it's ``hard to say" the exchange rate is ``fundamentally too high," Lowe said.

President Donald Trump complains regularly about what he calls "fake news." What's got some statisticians worried, though, is the risk of doctored economic data coming from the administration itself.

While there are government directives in place to prevent that from happening, the number crunchers worry that the President's occasionally cavalier comments on the economy and economic statistics, and his apparent disdain for economists in general, could mean trouble ahead.

In what may be a sign that is happening, the Wall Street Journal reported that the Trump administration is considering changes that would make the US trade deficit look bigger than currently reported. Citing unidentified people involved in the discussions, the newspaper said the new calculations could be presented to Congress, but that it wasn't clear if they would be included in official government data on the economy.

Trump has repeatedly accused past administrations of failing to protect America's interests on the trade front. Figures showing larger deficits would serve to buttress that argument and support the President's calls for retaliatory action against China and other US trading partners.

The fears about data manipulation also arise from the non-traditional approach the Trump administration has taken to interpreting economic data. The President himself has repeatedly cast the "real" unemployment rate as far above the official rate, using figures that incorporate all those of working age who aren't employed.

"Don't believe these phony numbers," Trump told supporters of the jobless rate in early 2016. "The number is probably 28, 29, as high as 35 [per cent]. In fact, I even heard recently 42 per cent."

While this captures a broader swath of those without a job than the more well-known 4.8 per cent jobless rate, it's misleading because it includes those who choose to be out of work for reasons including school, parenting, care for a family member, or retirement. In 2015 Trump said the US had 93 million people out of work.

Trump has also yet to nominate anyone to the Council of Economic Advisers, established in 1946 to provide presidents with objective economic analysis and advice. Indeed, staffers at the council complain that the White House seems to be giving short shrift to the regular reports they produce on the economy, a person familiar with the matter said on condition of anonymity.

 

Shares have opened slightly lower as investors digest another flood of earnings reports.

The ASX is down 0.15 per cent at 5786.6, with the IT and health sectors weighing most.

After solid gains in the previous two sessions, ANZ have dropped 0.7 per cent.

Among companies reporting:

• Seek: -3.05%
• Oil Search: -2%
• Caltex: +2.5%
• Monadelphous: +3.2%
• Greencross: +4.7%
• Aconex: -3.5%
• Virtus Health: -4.15%
• Independence Group: -6.65%
• FlexiGroup: -3.85%
• Seven Group: +0.8%
• Bradken: flat
• Scentre: +0.1% 

Fore more on all of today's earnings, see the AFR's reporting season blog

New McPherson's chief executive Laurie McAllister has cleared the decks, slashing the value of appliances and nail care brands by $20 million and sending the consumer products group to a bottom-line loss of $11.8 million.

McPherson's net profit before asset impairments and goodwill writedowns fell 10.8 per cent to $7.9 million as sales slumped 11.4 per cent to $149.1 million, dragged down by the closure of an unprofitable impulse merchandising division and weaker sales of private label and agency brands.

Revenues also took a hit from the closure of Woolworths' Masters chain, which dented sales of McPherson's appliances brands, Euromaid and Baumatic.

However, its core health, wellness and beauty brands, which include Manicare, Lady Jayne, Dr. LeWinn's, A'kin, Swisspers, Moosehead and Maseur performed well.

"The deliberate strategy to reduce sales of low margin agency and private label products led to a material improvement in margins across all key brands and a decrease in revenue of 7 per cent,"  said Mr McAllister, who took the helm in November from long-serving CEO Paul Maguire.

Underlying earnings before interest and tax fell 6.6 per cent to $13.5 million.

McPherson's wrote down the value of its appliances brands by $12 million after Master's demise and its Revitanail brand by $7.8 million following range rationalisation. 

Net debt more than halved, falling from $93 million to $41 million, and gearing eased from 46 per cent to 30 per cent.

McPherson's maintained its interim dividend at 6¢ a share, payable March 23.

Seven Group Holdings swung to a $41.8 million first-half loss from a year-earlier profit of $7 million as it wrote down the value of its big asset, Seven West Media.

​Excluding the write-down and other one-off charges, underlying profit in the six months ended December 31 fell 7 per cent to $104 million. Revenue dropped 4.8 per cent to $1.3 billion and the dividend was unchanged at 20¢.

The company, controlled by billionaire Kerry Stokes, said it expected full-year profits to climb 5 per cent to 10 per cent, driven by an improvement in the mining industry which is driving demand for Caterpillar vehicles. 

The company owns WesTrac Group, the Caterpillar dealer in Western Australia, NSW and the ACT and in north-eastern China. WesTrac Group is one of Caterpillar's top five dealers globally by sales.

"The mining production cycle is supporting parts and component demand growth as customers continue to focus on costs and push productivity targets," chief executive Ryan Stokes said.

"We anticipate continued momentum from our WesTrac businesses into the second half, which supports our upgrade to full-year guidance that underlying EBIT will be 5 to 10 per cent up on the previous year," Stokes said.  

The company had previously said EBIT would be in line with 2016's full year result of $302.8 million. 

The company owns 41 per cent of Seven West Media, which owns the Seven Network, West Australian Newspapers, Pacific Magazines and Yahoo!7.

Seven West Media's first-half profits, published last week, fell 91 per cent to $12.4 million.

Seven Group invests in oil and gas projects in Australia and the US and owns AllightSykes, a supplier of lighting towers, generators and pumps, and has a 45 per cent of Coates Hire, Australia's largest equipment hire business.   

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IG analysts Gary Burton wonders whether we are in the midst of a multi-decade bull market:

Many may remember the tech wreck of 1999 and 2000 only to be followed by the September 11 events, my recollection at the time was - when would the volatility ever end?

Then suddenly on the 10th of March 2003, the markets on a global scale posted a reversal week and the rally had begun, the indices lows were never breached in the following years.

At the time someone said get ready for the greatest bull market ever! In that one week volatility changed to the upside. Why? Following the recessions in Europe and the US global growth was showing some green shoots of optimism.

To this day I still wonder how he knew that a new bull market was underway. On March 9, 2009 the GFC ended and the indices lows have never breached with volatile periods and lazy multi-year gains in the US and Australia.

So while the US enjoyed a president's holiday the US futures have made a 41 point gain on top of the record close on Friday night. This is small signal again, that a true bull market is underway, when no economic news and pending bad news from the European pact via potential debt default in Greece and populist party election in France lead by Marine Le Penn fails to play out in the VIX  volatility still sits at record lows of 11.50.

Read more.

Petcare chain Greencross is expecting another year of double-digit profit growth after delivering a 17.2 per cent increase in net profit to $21.9 million in the 27 weeks ending December.

Underlying net profit, excluding one-off costs in the prior period, rose 8.6 per cent to $22.9 million, in line with consensus forecasts around $22.6 million, underpinned by solid same-store sales growth, network expansion and well controlled costs.

Revenues rose 13.7 per cent to $412.4 million as same-store sales growth of 4.3 per cent was augmented by an 11 per cent increase in retail stores and veterinary clinics.

Chief executive Martin Nicholas reiterated his forecast for underlying earnings and net profit to grow at similar levels to 2016, when underlying net profit rose 10 per cent.

The group increased its interim dividend by 0.5¢ or 5.6 per cent to 9.5¢ a share, payable March 24.

Greencross is Australia's largest stand-alone pet care chain, having snapped up dozens of independent retailers and veterinary clinics in the past few years.

It now owns about 401 outlets - 237 retail stores and 164 vet clinics - under the brands Petbarn, City Farmers, Animates and GreencrossVets.

So far this year it has opened 41 retail stores, vet clinics and instore" clinics. Last year it opened 21 stores and clinics and acquired nine independent vet clinics, lifting its share of the $9 billion Australian and New Zealand pet care market to about 8 per cent.

However Greencross is facing increasing competition from rival chain National Veterinary Care, which acquired four vet clinics in Australia and New Zealand last week, taking its network to about 50 clinics.

Greencross shares have slipped 3.3 per cent this year and by 9 per cent over the last 12 months to $6.63.

Fairfax Media has entered a trading halt pending an announcement related to its real estate advertising arm, Domain Group.

The AFR's Street Talk column this morning reported the company is considering a spin-off of Domain into a separate listed vehicle by the end of the year, citing unnamed sources.

The media group is expected to retain between 60 per cent and 70 per cent of Domain under the separation plan, which is designed to allow the market to place a value on the Domain business, long considered the most valuable part of the wider Fairfax group. 

Domain chief executive Antony Catalano would be the chief executive of the new group. 

Domain has been the shining light within Fairfax, the publisher of the AFR and this website, for much of the past decade, growing to earn about $130 million a year for the publishing company.

Analysts expect Domain to be worth up to $3 billion as a separately listed entity, based on multiples applied to listed rival REA Group.

A strong performance in fuels marketing has failed to prevent a 17 per cent decline in core full-year profit for Caltex Australia, to $524 million, slightly ahead of its December guidance.

Caltex had forecast its net operating profit before movements in oil prices - the number most closely scrutinised by the market - would be between $500 million and $520 million for the full year, down from $628 million in 2015, as the contribution from the refining business dropped.

Bottom line profit climbed 17 per cent to $610 million on revenues that were 10 per cent lower at $17.9 billion.

Caltex declared a final dividend of 52c a share, in line with its policy of paying out 40-60 per cent of core profit.