The Morning Bull - Australian Market Morning Update Thursday, 22 Oct 2026
Australian equities are set for a cautious open, with sentiment pinned to one thing: expensive energy. Brent crude pushing above US$110 a barrel has quickly turned the overnight tone defensive for the local market.
The key driver is the tighter global oil balance. US crude inventories fell by 3.061 million barrels in the week to 16 October, much larger than the expected 0.8 million barrel draw, while Middle East supply risk keeps prices elevated.
Higher oil prices feed directly into fuel costs, which can pressure inflation expectations and keep rate cut hopes in check. That backdrop tends to weigh on interest-rate-sensitive areas and squeezes margins for energy-intensive businesses, even as producers see stronger pricing.
The open question is whether this oil spike proves temporary or persistent. Upcoming inflation reads and central bank commentary will effectively decide whether investors treat today as a short-term shock or the start of a more expensive energy regime.
Stocks to Watch Before the Opening Bell
AGL Energy (AGL)
AGL Energy has lodged its 125 MW Abermain grid battery for federal environmental assessment, adding another step in its shift away from coal and toward its 1.4 GW storage goal by 2035. A fund manager profile also framed AGL as undervalued. Watch for progress on approvals and how quickly AGL converts its battery pipeline into operating assets.
AUB Group (AUB)
AUB Group is buying Aon's One Underwriting Australia, a specialist managing general agent serving more than 250 brokers. The purchase broadens AUB's exposure to complex property, liability and niche risks, and increases its agency scale with insurers. The key thing to monitor now is regulatory sign off and any detail on earnings contribution once the deal completes.
Cleanaway Waste Management (CWY)
Cleanaway Waste Management used its AGM to outline higher underlying earnings for FY26 and confirmed a fully franked full year dividend of 6.85 cents per share. The bigger story is the agreed A$3.095 per share takeover by EQT Infrastructure, which the board supports in the absence of a superior offer. Investors should track regulatory reviews and the shareholder vote timetable.
Top Movers
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NEXTDC (ASX:NXT)jumped 7.48% as traders reassessed recent earnings guidance cuts and the earlier share price selloff.
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Nuix (ASX:NXL)rose 6.48% after launching its Nuix Neo AI Agent for forensic grade investigative analytics.
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Pro Medicus (ASX:PME)gained 4.65% following a new A$24m, 7 year US imaging contract for Visage 7.
Top Losers
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Codan (ASX:CDA)declined 8.08% after investors reacted to AGM commentary on capital allocation flexibility and future acquisitions.
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MA Financial Group (ASX:MAF)fell 7.71% after freezing redemptions on A$2.3b property lending funds and winding up a retail fund.
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Telix Pharmaceuticals (ASX:TLX)declined 5.92% following strong Q3 results, reaffirmed 2026 guidance and details on the ITM merger.
On The Radar
For Australian investors, the next few sessions revolve around homegrown inflation data and a packed resources earnings slate that lands just as oil stays above US$110 a barrel.
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Australia Inflation DataThu 28 Oct. Monthly CPI, forecast at 0.6% MoM and 4.1% YoY after 4.0%, will shape views on borrowing costs and could be key for rate sensitive parts of the ASX if price pressures surprise either way.
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Australia Trimmed Mean CPIThu 28 Oct. Core inflation, projected at 0.3% MoM and 3.6% YoY in line with the previous print, will matter for rate expectations and by extension for banks and high dividend defensives.
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Australia S&P Global PMIsThu 22 Oct. The manufacturing PMI last sat at 49.6 with a 49.4 forecast and services at 51.9 with a 51.1 projection. Any gap either side of those levels feeds directly into how durable corporate earnings look into year end.
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US Fed Interest Rate DecisionWed 28 Oct. A decision that keeps the policy rate near 4% with paired commentary arrives while Brent trades above US$110. Any change in tone on inflation could move the US$ and ripple through to the AUD and local exporters.
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Resources Earnings ClusterWed 28 to Thu 29 Oct. Quarterly updates from miners including Sandfire Resources, Mineral Resources, Perseus Mining, Stanmore Resources, Lynas Rare Earthsand Champion Ironput cost control and volume guidance under the microscope just as higher energy input prices challenge margins across the sector.
Sector & Industry Watch
Energy: Oil-sensitive stocks grind higher
Energy is edging up over the past week, helped by Brent crude above US$110 a barrel and steady local sector gains. Higher oil prices can lift revenue for producers but also increase diesel and fuel costs across the economy. For holders of oil and gas stocks, the key local signal is quarterly reports from producers such as Santos and Beach Energy, which show how they are managing project costs and volumes at these price levels.
Real Estate: Property still under pressure from rates
Real Estate has slipped over the past seven days, even after a small rise over the month, as higher for longer rate worries keep pressure on listed landlords. More expensive debt can squeeze profits for REITs and reduce appetite for big developments. Watch the next Australian inflation data and any shift in Reserve Bank of Australia commentary, because that combination heavily influences funding costs and sentiment toward listed property.
Materials and Metals and Mining: Miners cool after a hot run
Materials and the broader Metals and Mining group have eased over the week and over the past month after solid one year gains. Strong operational news from companies like BHP, Fortescue and a wave of gold and rare earth explorers shows plenty of activity, but higher diesel and input costs can pressure margins. For investors, the upcoming cluster of resources earnings and production updates on 28 to 29 October is the main check on whether recent weakness remains a pause or becomes a deeper reset.
Consumer Staples: Defensive names back in favour
Consumer Staples have climbed solidly over the past week and month, with one year and year to date returns both positive. In a market worried about rates and inflation, supermarkets and essential retail can feel more comfortable as shoppers keep spending on food and household basics. The next catalyst is the Australian monthly CPI print, which will shape views on how stretched household budgets become and whether defensive spending stays as resilient as recent sector performance suggests.
Banks: Rate expectations support recent rebound
Banks are up over the past week and month after a weaker one year stretch, helped by better sentiment toward Financials more broadly. Higher rate expectations can support lending margins but also keep pressure on mortgage customers, as seen in ANZ's integration of Suncorp Bank loans. The big test is the upcoming Australia trimmed mean CPI and RBA signals, which will influence both borrowing costs and how investors view the balance between bank earnings and credit risk.
Don't Wait For The Winners, Find Them
With concerns about higher-for-longer interest rates still pressuring property and rate-sensitive stocks, focus on resilience first and start with this list of 6 resilient stocks with low risk scores
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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