The banks are the best performing sector this afternoon, with the big four lenders shaking off a bit of early weakness to advance in a solidly higher ASX. The benchmark is up 35 points, or 0.6 per cent, at 5980, as it claws its back to the 6000 mark. The All Ordinaries is up 32 points, or 0.5 per cent, at 6062 and the Australian dollar is trading at US75.53 cents. Banks have struggled over the past week, after news of royal commission into the sector emerged last Thursday.But the sector saw a bit of buying today, with Westpac up 1.4 per cent, ANZ up 1 per cent, NAB higher by 0.8 per cent and CBA edging higher by 0.3 per cent. Treasury Wine Estates climbed 2.2 per cent and Goodman Group advanced 1.6 per cent as the Australian dollar headed towards US75 cents following some disappointing trade data. Metal markets have seen some big moves this week, with copper falling sharply on Tuesday and iron ore sagging on Wednesday, and miners continued to lag on Thursday, with BHP down 0.3 per cent, South32 lower by 0.6 per cent and Fortescue down 0.4 per cent. Tassal Group dropped 7.5 per cent after a downgrade to underweight at JPMorgan. Nufarm warned today its half-year earnings would suffer from weak November trade and the planned shutdown of its Victorian facility.Chief executive Greg Hunt on Thursday told the company’s annual general meeting that Nufarm expected half-year earnings of $70 million to $80 million.That compares to $85 million in underlying earnings before interest and tax in the prior corresponding period.Nufarm’s November sales had been hit by a delay in the farming season across parts of Latin America and a 10 per cent fall in the Brazilian market, year-on- year, he said.North America had had a good start to the year year with solid early order sales in the turf and ornamentals segments.And, despite optimism for local summer cropping thanks to recent rains on the east coast, Nufarm expects its Australian earnings will be lower due to scheduled shutdowns at its Laverton, Victoria, plant.Chairman Donald McGauchie said industry conditions remained tight and supply constraints on raw materials coming out of China would put pressure on prices but continued earnings growth was expected over the 2018 and 2019 financial years.That was due to the company capitalising on several opportunities that had emerged out of the industry consolidation in 2017, he said.Nufarm’s acquisition of a new portfolio of European crop protection formulations in October is expected to add mid-to-high single digit earnings per share (pre- amortisation) in the first full year of ownership.“For the full year, we still anticipate the combination of revenue growth and cost savings benefits to result in earnings growth for the group – prior to any contribution from the European acquisitions,” Mr Hunt said.Mr Hunt said the transactions were currently with the European Commission and that guidance on their contribution would be provided in the first quarter of the 2018 calendar year.Shares are down 1.3 per cent. China’s banks should increase their capital buffers to protect against any sudden economic downturn following a credit boom, the International Monetary Fund said.In its first comprehensive assessment of China’s financial system since 2011, the IMF recommended “a gradual and targeted increase in bank capital.”In a worst-case scenario, IMF stress tests suggested the country’s lenders would face a capital shortfall equivalent to 2.5 percent of China’s gross domestic product – about $280 billion in 2016 – together with ballooning soured loans.Overall, 27 of 33 banks stress-tested by the fund, covering about three quarters of China’s banking-system assets, were under-capitalized by at least one measure.A larger financial cushion would better reflect potentially underestimated risks stemming from the banks’ exposure to opaque investments, and absorb losses as implicit government guarantees are removed, the fund said.China’s top four banks, led by the world’s largest lender by assets Industrial & Commercial Bank of China, have enough capital, the fund said. But it said the nation’s smaller lenders, including those focused on individual cities “appear vulnerable.”The findings reflect the burden on a financial system that’s doubled in size in 10 years while China evolves from an export-oriented economy to one based on services and consumption. The call for capital highlights the risks during that transition caused by government policies aimed at protecting jobs or propping up failing state entities.“Stress test results reveal widespread under-capitalizationof banks other than the Big Four banks under a severely adverse scenario,” the fund said in its report. “Increasing capital would enhance the resilience and credibility of the financial system, as well as reassure markets.” The fund didn’t name the specific banks that need more capital.A2 Milk shares are down 3.3 per cent at $7.12 today.The firm settled out of court with Lion Dairy & Drinks over a long-running dispute about the rights to use the term “A2 protein” on their labels.A2 Milk and Lion Dairy & Drinks did not provide details about whether Lion, which is owned by Japanese brewing giant Kirin Corporation, will continue to use A2 on its PURA and Dairy Farmers milk labels.A2 Milk had argued that Lion was engaging in misleading and deceptive conduct by including the statement “contains A2 proteins” as their milk also contains A1 proteins.“The parties have mutually agreed not to proceed with their cases against each other. The terms of the settlement are confidential. The parties are very satisfied with the outcome and will remain focused on building and maintaining the strength of their individual brands,” the companies said in a statement.In late August, Lion lodged cross-claims with the court arguing that A2’s representations that A2 milk makes many customers feel better than after drinking normal milk are false.A2 chief executive Geoffrey Babidge, who declined to comment further when contacted, said last month the company would consider paying dividends after reporting its net profit had increased by 138 per cent in the first four months to October to $NZ52.3 million.Earnings before interest, tax, depreciation and amortisation rose 120 per cent to $NZ78.4 million while revenue climbed 69 per cent to $NZ262.2 million.Morgan Stanley’s equity strategy team have taken a look at the weaker dollar and possible impact on the equity market. Here’s what they had to say: Our global FX team is calling for a correction in the AUD to 0.67 over the course of 2018 as subdued commodity prices, weaker relative rate expectations and ultimately inverse carry combine with negative housing correlations.The ASX 200 has a meaningful basket of stocks that offer leverage to a weaker AUD.We estimate in Industrials the market weight of these names is circa 20 per cent and recommend an overweight exposure to this theme. The trade has worked since 2013 and we see an extension of this performance into 2018.Indeed Australian dollar spot now appears to be below what we assume is embedded in consensus forecasts for earnings and as such a tailwind is building for the direction of earnings revisions from the first half of 2018.Notwithstanding muted expected ASX 200 Index returns over the next 12 months, we see good alpha opportunity around positioning in stocks that will benefit from a forecast decline in the AUD. These can be true global growers, US centric, largely translators or domestic beneficiaries.We also see merit in holding resource and energy exposures given the sustained momentum forecast in global growth as well as improved quantum and quality of earnings for key names.There will be a continuing build in both fiscal response and infrastructure offset to the housing and consumer headwinds – finding exposure here is key, as will be a preference for non-bank financial stocks.An adjustment downward in the AUD is required to balance the economy. For the market it adds a tailwind to many stocks that already have stronger growth outlooks in offshore markets. Closer to home domestic beneficiaries around education and tourism are in focus as well as the prospect of an increase in inbound M&A activity.The one sector where it looms as a negative is retail where COGS would ultimately increase at a time where consumers’ willingness to accept higher prices is limited. The Australian dollar dropped 0.3 per cent to US75.44 cents after the release of trade data for October and is now trading back at mid-June levels, after hitting a peak of more than US80 cents back in September. The country’s trade surplus narrowed to $105 million in October, from a revised $1.6 billion surplus in September.Exports fell 3.0 per cent in the month while imports were up 2.0 per cent, the Australian Bureau of Statistics said.“The slump in the international trade surplus, to $0.1bn in October from $1.6bn in September (consensus $1.4bn) is due to the reduction in demand for iron ore and coal exports linked to the pollution crackdown in China and a rise in the cost of imported oil.,” said Paul Dales at Capital Economics.“Australia has still managed to notch up 12 consecutive months of a trade surplus for the first time since 2011, but only just.“The 2.8% m/m fall in export values was mainly due to a 10% m/m decline in iron ore exports and partly due to a 3% m/m drop in coal exports. Both were driven by lower prices and lower quantities, the latter as China’s demand for polluting commodities has been reduced by the authorities.“Overall, it’s possible that the total trade surplus will turn into a deficit in the coming months, at least for a short while. And while it is early days yet, after making a neutral contribution to GDP growth in the third quarter, net exports may be a small drag on GDP growth in the fourth quarter.”The merger of Fox Sports and Foxtel has been given a green light by the regulator, after its review found joining the companies together would not lessen competition.Rupert Murdoch’s News Corp owns 100 per cent of Fox Sports and is part owner of Foxtel in a joint arrangement with telecommunications company Telstra.The new merger will bring the two companies together under common ownership, with News to hold 65 per cent and Telstra 35 per cent.Australian Competition and Consumer Commission chairman Rod Sims said it would not oppose the merger as Foxtel and Fox Sports had a “close and long-standing relationship” operating under News and Telstra.“Given News’ current interests in both Foxtel and Fox Sports, it would be unlikely that Fox Sports would be made available to competitors of Foxtel in the absence of the merger,” Mr Sims said.“The ACCC won’t oppose this merger after finding that the commercial incentives of Foxtel, Fox Sports, News, and Telstra will not be substantially altered. Therefore, the change in ownership structure is unlikely to substantially lessen competition,” he said.Bitcoin extended its rally overnight, breaking above $US13,000 to a record high despite questions about the cryptocurrency’s real value and worries about a dangerous bubble.Bitcoin received a boost after Friday’s announcement by the main US derivatives regulator that it would allow CME Group and CBOE Global Markets to list bitcoin futures contracts.The move opens the door to added regulation but also more mainstream adoption, as bitcoin futures and other derivatives would make it easier to trade the new asset class.“Simply the perception in households around the world that the CME and the CBOE are providing legitimacy to bitcoin is really what is driving the massive rally here,” said Karl Schamotta, director of global product and market strategy at Cambridge Global Payments in Toronto.Bitcoin’s ascent of over 10-fold from below $US1,000 at the start of the year has drawn regulatory scrutiny around the world.Some high profile individuals such as Nobel Prize-winning economist Joseph Stiglitz have said the cryptocurrency should be outlawed.The current craze for bitcoin, and cryptocurrencies in general, have been likened by some to the 17th century Dutch tulip mania and more recently the dotcom bubble.“If you look at this sort of pattern it has repeated itself many, many times. The only way it ends is when sentiment shifts and that’s a deeply unpredictable thing,” Cambridge Global Payments’ Schamotta said.Bitcoin was up 12.42 per cent at $US13,127.01 on the Luxembourg-based Bitstamp exchange after surging to the record peak of $US13,127.01.It sure was an inauspicious start to Australia’s retail revolution. Cyclone Amazon didn’t flood the market with incredible discounts, didn’t blow over shoppers with its range of products, or smash competitors with its availability and delivery times, writes the SMH’s Elizabeth Knight. But it did deliver one thing – a false sense of security that its rivals are safe, and so are their shareholders.After all the fear and anticipation of the past year, shares in many listed Australian retailers rose on Amazon’s launch day, and some, such as JB Hi Fi and Harvey Norman, actually soared more than 6 per cent.Even the beleaguered Myer share price moved up, while Super Retail Group and Premier Investments, experienced solid gains.Certainly there was some rationale in the view that Amazon was not going to be the Grinch this Christmas.But for investors looking for anything but a short-term trade, this response is way too premature. The market took a bit of a reality check on Wednesday, with retail stock prices generally drifting lower again.Certainly there was some rationale in the view that Amazon was not going to be the Grinch this Christmas.But for investors looking for anything but a short-term trade, this response is way too premature. The market took a bit of a reality check on Wednesday, with retail stock prices generally drifting lower again.There was a tangible expectation – yes, in large part created by the media – that Amazon would take cheap to a whole new level in Australia.But except for a few high-profile items, that didn’t happen. Social media delivered its verdict – ripped off! But let’s wait and see how long this reprieve will last.Amazon boss Jeff Bezos didn’t build a company selling US$136 billion of goods and services by getting the customer offer wrong.Read more hereThe ASX will move its equity markets settlement and clearing system onto blockchain-inspired technology being developed by a New York start-up run by Blythe Masters.In an announcement that will be of significant interest to global exchanges and the technology industry, ASX said on Thursday morning it was comfortable replacing its ageing CHESS system with a new one using distributed ledger technology (DLT).The exchange has not specified the timing for the move.The technology is being developed by Digital Asset Holdings, in which ASX has an equity stake, and is run by Ms Masters, a former JP Morgan investment banker.Distributed ledger technology operates like a blockchain but does not require transactions to be confirmed by an external network of computers. It will replace the central ledger operated by CHESS with a synchronised one, held on the systems of each market participant. This computer architecture creates a single source of the true state of the ledger.ASX believes it will create efficiencies for market participants by removing the need for records to be reconciled against a central system. Costs could be saved, once the system is operating, by reducing headcount for back office reconciliation roles.Dominic Stevens, ASX managing director and CEO, said in a statement the DLT system “will enable our customers to develop new services and reduce their costs, and it will put Australia at the forefront of innovation in financial markets.”“While we have a lot more work still to do, today’s announcement is a major milestone on that journey,” he said.ASX deputy CEO Peter Hiom said ASX “has formed a strong partnership with Digital Asset over the past two years, and we’re confident we have chosen the right partner.”Shares are inching higher in early trading, with gains in consumer staples companies working to offset more losses in the mining sector.The S&P/ASX 200 index added 4 points, or 0.1 per cent, to 5950 while the All Ordinaries rose 3 points, or 0.1 per cent, to 6033. The Australian dollar traded at US75.63 cents.US stocks didn’t provide Australian investors with much of a lead after a choppy session on Wall Street saw the major benchmarks put in a flat performance.Copper recovered a bit of ground after falling sharply this week but iron ore prices dropped along with Chinese steel futures.Miners were lower again in Australian trading, after losing ground yesterday on the copper price sell off. South32 lost 1.5 per cent, BHP edged down 0.2 per cent, Newcrest slipped 0.4 per cent, Galaxy Resources declined 2.9 per cent and Orocobre lost 2.2 per cent.Heavyweights gaining ground today included supermarket group Woolworths, up 0.3 per cent, and telecom group Telstra, also higher by 0.3 per cent.Metals are a focus this week after copper’s spectacular slide.On Wednesday, aluminum fell for a third straight day to the lowest in almost four months as traders reassessed bets on tightening supplies and rising Chinese demand that have fuelled a rally in metals.China’s pollution cleanup is weighing on economic growth this year while a cooling property market will damp investment into 2018, according to a Bloomberg survey. The country is the biggest buyer of industrial metals.A strengthening dollar,which makes raw materials priced in the greenback more expensive to holders of other currencies, also pinched prices.Aluminum, one of the best-performing commodities of 2017, is wavering as signs that China’s growth is slowing fuel concerns about demand just as doubts grow about the Asian nation’s plans to reduce smelter production.Those concerns have rippled through the London Metal Exchange this week, with the bourse’s main gauge dropping by the most in a year on Tuesday.“Yesterday’s sharp decline has no doubt prompted us to reevaluate our bullish bias toward the market going into year-end,” Edward Meir, an analyst at INTL FCStone in New York, said in a note to clients on Wednesday.Aluminum for delivery in three months fell 1.6 per cent to settle at $2,019 a metric at 5:50 p.m. in London. Prices slumped earlier to $2,015.50, the lowest since Aug. 9.Nickel, tin and zinc also fell. Copper rose 0.1 per cent after a 4.1 per cent slump on Tuesday, the biggest loss in more than two years.Lead advanced on the LME on Wednesday.”Long liquidation continues with sell pressure re-emerging,” Alastair Munro, an analyst at Marex Spectron, said inan emailed note.The Australian dollar’s latest slide has pared its year-to-date advance against the greenback to less than 5 per cent, and the outlook for the local currency is unclear.The Aussie was 0.6 per cent lower at US75.64¢ at about 6am AEDT, near its overnight low. The retreat is in keeping with a volatile month of trading in which the dollar has shed 1.7 per cent.The latest move came after a slight miss in the headline third-quarter GDP data on Wednesday.Gross domestic product rose 0.6 per cent in the September quarter from the previous three months, when it rose by a revised 0.9 per cent (from a previously reported 0.8 per cent), the Australian Bureau of Statistics said.From a year earlier, growth rebounded sharply to 2.8 per cent, from 1.8 per cent in the June quarter – after the impact of a 0.5 per cent contraction in the September quarter of 2016 fell out of the annual calculation. Economists had forecast GDP growth of 0.7 per cent and 3 per cent respectively.The Australian dollar remains “the laggard in the dollar bloc”, according to TD Securities’ global strategy team, which expects the Australian dollar to lose value against both the New Zealand and Canadian dollars “near term”.“The weak GDP report overnight offset the balanced tone from the RBA, bogging it down ahead of US76¢. The report sits in line with the RBA’s growth expectation but fits the narrative that the bank will remain on hold well into 2018,” TD said.SPONSORED POSTHere’s IG’s Chris Weston on key market moves overnight and what to expect today: Broader Asian trade turned a touch sour yesterday, with the Nikkei 225 and Hang Seng closing down 1.9 per cent and 2.1 per cent respectively and signs of volatility creeping back into Asian equity markets.We saw focus placed on tighter financial conditions in China, with the PBoC choosing to withdraw liquidity from the system and stepping back from its regular use of reverse repos. A theme to watch in the session ahead as it could promote volatility in China sensitive assets.Aussie SPI futures are actually indicating a positive feel to the ASX 200 open, with SPI futures sitting at 5948 at 4.10pm (and the close of the ASX 200) and now residing at 5974. So our call is for the ASX 200 to open closer to 5968 and one suspects Aussie banks should put in the points, with the financial sector likely to be up some 0.5 per cent or so.The AUD has been one of the weaker plays in G10 FX markets, joining the CAD and SEK, with some focus on the Bank of Canada rate decision and the somewhat cautious language which has eased the CAD back a touch here.AUD/USD has traded lower into $0.7557 and again it’s the bond market that everyone is focused on, with the yield differential between Aussie treasuries and US treasuries narrowing a touch.The market really didn’t like the Aussie Q3 GDP print, specifically the consumer spending element, which was the weakest quarter since Q4 2008. All eyes on China today and whether they again allow liquidity to ebb out of the market.Read more hereAll the overnight market action in numbers:SPI futures up 17 points or 0.3% to 5968AUD -0.5% to 75.63 US centsOn Wall St: Dow -0.1%, S&P 500 flat, Nasdaq +0.2%In New York, BHP -0.6% Rio +0.6%In Europe: Stoxx 50 -0.3%, FTSE +0.3%, CAC flat, DAX -0.4%Spot gold -0.1% to $US1264.18 an ounceBrent crude -2% to $US61.61 a barrelUS oil -2.3% to $US56.32 a barrelIron ore -3.4% to $US69.36 a tonneDalian iron ore -2.6% to 520.5 yuanSteam coal +0.6% to $US97.10, Met coal +1.8% to $US226.00LME aluminium -1.7% to $US2018 a tonneLME copper +0.1% to $US6550 a tonne10-year bond yield: US 2.32%, Germany 0.29%, Greece 4.74%, Australia 2.50%On the economic agenda today:AiG performance of construction NovemberTrade data OctoberGerman industrial production OctoberUK Halifax house prices NovemberStocks to watch:Regional Express Holdings reinstated at hold at APP SecuritiesRio Tinto upgraded to hold at MorningstarTassal Group downgraded to underweight at JPMorganTegel Group cut to neutral at First NZ CapitalTPG Telecom upgraded to hold at Morgans FinancialWoodside upgraded to buy at MorningstarWall Street turned weary on Wednesday, with a slide in energy stocks and Home Depot offsetting gains in the technology sector..The Nasdaq had slipped 1.6 per cent in the past three days, its worst such fall in more than three months amid doubts over stretched valuations and the impact of a US tax overhaul on corporate earnings.Investors are evaluating the details of the new tax code as the Senate Republicans attempt to reconcile their version of the bill with that of the House of Representatives.The pan-European STOXX 600 index ended down 0.1 per cent after losing as much as 1 per cent before consumer staples and other defensive stocks outbalanced struggling financial shares.Hong Kong stocks posted their biggest single-day loss in over a year on Wednesday, with sentiment hurt by a tumble in index heavyweight Tencent and simmering worries over North Korea.At close of trade, the Hang Seng index was down 618.00 points or 2.14 per cent at 28,224.80.Japan’s Nikkei share average posted its biggest fall in 8 1/2 months on Wednesday as investors rushed to lock in gains after it broke below the key technical support from its 25-day moving average. The Nikkei share average fell 2 per cent, its biggest daily fall since March 22, to a near three-week low of 22,177.04.Good morning and welcome to the Markets Live blog for Thursday. Your editor today is Sarah Turner. This blog is not intended as investment advice.Fairfax Media with wires.