Sunset Strip | Aussie Afternoon Institutional Market Wrap

Aussie market got slaughtered on negative global lead, rising bond yields and below par corporate results lead by CBA and WOW. The Turnover was a massive $7.4b. After trailing US 30 year long bond yields, Aussie bond yields have run up nearly 70 bps in just over 2 weeks to now be at a premium. The last time Aussie bond yields were a discount was Asian crisis in the late 90’s and coincidently the Chinese market has dropped nearly 6% in 2 days as the government tries to remove political families from holding investment in companies. RBA and the Federal Government have positioned themselves out of the economic picture in the short term. Australia is seen as the beta for China and the falling Chinese market may be forcing global investors to sell out of our bonds and buy US bonds. The market is now only about 100 points away from where we expected to see support due to yield…not long to go…it may happen earlier…keep an eye on the bond yields. (VIEW LINK)