Sunset Strip | Aussie Afternoon Institutional Market Wrap

Aussie market got hit again with negative global lead, rising bond yields and NAB raising drove bank sector sell off as funding vehicle. The Turnover was a massive $7.5b. Market may be spooked with the Chinese market as it pulls back hard…as I write the index is down 8.5% in 3 days. This capital flowing out of Australia and overall liquidity crash with global bond market selloff may force RBA to put up rates to keep capital or start our own QE. The falling Chinese market should speed up the stimulus plans of the government and support commodities. RBA is expected to water down the currency tomorrow by re-inserting the “negative bias” into the monetary policy statement tomorrow. There are a number of major data points out of US in the next few days, Greece dancing with Euro and UK elections overnight will set the short term trend. We are beginning to see value, but the risk is high….patience is a virtue!!! (VIEW LINK)