Issue #32 | Barrels, Bonds & Bitcoin

ASX - Top 3 Winners & Losers
Deals Down Under - Alphabet's Kangaroo Bond
Global Markets - Bitcoin’s Surge
Other News - Aussie Politics, Sport and Culture

The ASX 200 finished the week down 0.6% as an oil price spike undid a brief rally in US bond markets. Brent crude broke through $93 a barrel for the first time in three weeks after the US threatened tougher sanctions on Iran, reigniting inflation concerns and denting hopes for further RBA rate cuts this year. Real estate and tech names took the biggest hit in the sell-off, while gold miners found support as bond market strain kept safe-haven demand alive. 

The week’s best performers 

CSL (ASX:CSL) +23.30%

CSL, the biotech behind plasma therapies and vaccines, capped a seven-week turnaround that saw its share price surge 85% off May's lows. The rally began after a brutal May guidance cut tied to its troubled Vifor acquisition, which markets have since reframed as a credible reset under the interim CEO rather than another warning sign. A strong FY26 result and guided return to growth for FY27 pushed buyers further in, even as the stock now looks stretched by most trading measures. The same momentum that drove the surge can just as easily reverse it. 

Ora Banda Mining (ASX:OBM) +23.28%

Ora Banda Mining climbed after its June quarter update confirmed record gold production of 39,552 ounces at its Davyhurst project in Western Australia, alongside a 75% jump in mineral resources. The gold miner also launched its "DRIVE to 300" strategy, centred on a new $375 million processing plant due to start up in FY28. With $267.7 million in cash and $468 million in total liquidity, Ora Banda has the balance sheet to fund the build, but investors will be watching closely to see if execution keeps pace with the ambition. 

Reliance Worldwide Corp (ASX:RWC) +20.16%

Reliance Worldwide, the plumbing products maker, jumped after confirming a non-binding $4.75 a share takeover approach from Brookfield Capital Partners, even as its FY26 result showed adjusted profit down 15.3% on tariff and copper cost pressures. The board has shelved its dividend and buyback while it works through the proposal, betting shareholders will prefer certainty over waiting out a rough patch. Brookfield still needs to firm up the offer, and there's no guarantee it will.

This week's worst performers

IRESS (ASX:IRE) -19.97%

IRESS tumbled despite reporting higher earnings for H1 FY26, with underlying profit up 47.1% and recurring revenue holding at roughly 95% of the group total. The fintech software provider also trimmed its FY26 revenue growth guidance to just 1-2%, and that softer top line appears to have outweighed the margin improvement in investors' eyes. It's a reminder that a profit beat doesn't count for much when the growth story looks like it's slowing. 

JB Hi-Fi (ASX:JBH) -15.31%

JB Hi-Fi, the electronics and appliance retailer that also owns The Good Guys and E&S, sank after a weak July trading update overshadowed a solid FY26 result that saw sales rise 4.8% to $11.1 billion and dividends hiked 22.5%. The retailer flagged declining sales across three of its four businesses in July, with management citing customers chasing promotions and stock shortages in tech categories. A strong year on paper wasn't enough to stop the market fixating on where trading is headed next. 

Megaport (ASX:MP1) -14.43%

Megaport, the data connectivity provider now expanding into GPU infrastructure, fell after its FY26 result showed a swing to a $39 million statutory loss, despite revenue growing 37% and annual recurring revenue up 62%. The loss stems largely from depreciation and integration costs tied to its Latitude.sh and Extreme IX acquisitions, as the company pivots from a capital-light network business into a heavier compute play. Markets clearly like the growth story, just not enough to look past the widening losses yet. 

Alphabet, the Google and Gemini owner, has raised $5.5 billion in Australia's largest-ever corporate bond sale this week, more than doubling the previous record of $2.25 billion set by Apple over a decade ago. It's the first time Alphabet has tapped the local market, as part of a broader push by hyperscalers to diversify funding away from US dollar markets while financing AI spending. Australia is now the third-largest corporate bond market in the world behind the US and Europe, making it a logical destination.

Demand was overwhelming, with the final orderbook landing at $18 billion, more than three times what the deal needed. Investors were drawn by intense interest in AI exposure, alongside a premium over Alphabet's existing US dollar debt that isn't often available from a high-quality issuer. Wealth managers also pointed to returns of 6 per cent at very low risk as an attractive alternative to term deposits or locking up capital in private credit. The bond's expected inclusion in a widely followed index is also set to draw passive buyers.

That demand let Alphabet price more cheaply than expected, with the three-year tranche tightening to 65 basis points over swap from 80 initially discussed, and the 20-year slice tightening to 185 basis points from 200. Betashares head of fixed income Chamath De Silva called it a historic moment for the local market. Fund managers expect more hyperscalers to follow, with Amazon tipped as the most likely next issuer given its own push to diversify funding.

For Australian investors, the deal broadens the domestic investment universe and reinforces Australia's position as a destination for global capital, giving local super funds and wealth managers rare access to a globally significant tech issuer without leaving the Australian dollar market.

Bitcoin jumped as much as 9.4% to trade around $US77,000 this week, its best weekly gain since March 2023, up roughly 22% in five days.

The US government borrows money by selling bonds, and investors have been demanding higher interest rates to keep lending to it, worried about how much debt it's piling up. To calm those fears, Treasury Secretary Scott Bessent said the government would double its buybacks of its own long term debt. That pushed investors toward riskier assets like Bitcoin and gold instead of safer ones like bonds, and set off a chain reaction: traders who had bet against Bitcoin were forced to buy it back fast to cut losses, wiping out nearly $2.5 billion of bearish bets in three days and fuelling the rally further.

Whether this Bitcoin surge holds is unclear. Standard Chartered flagged its $US100,000 year end forecast could now prove too low, while CoinShares cautioned the rally may stall around $US80,000 without clearer signs the Fed is done raising rates.

The buyback plan doesn't seem to be working yet, though. The 10-year yield rose to 4.73% on Friday, meaning borrowing costs are staying high regardless. Bank of America's Michael Hartnett warned that if this continues, it could mean a weaker US dollar and investors betting against riskier assets, including AI, in the weeks ahead.

This isn't just a US problem. Government borrowing costs have been climbing in places like the UK and Japan too, as investors everywhere grow wary of government debt loads. Because the US dollar underpins so much of world trade and lending, a failed attempt to bring US borrowing costs down would weaken the dollar and ripple through other currencies and markets. If the world's biggest economy can't convince investors its debt is under control, borrowing gets more expensive everywhere.

Thanks for reading Capital Down Under till the end! If you enjoyed this week's issue, feel free to forward it to a friend – we'd really appreciate it.

Also, if you had any thoughts, tips or ideas for next week, just hit reply.