Sunset Strip | Aussie Afternoon Institutional Market Wrap

Aussie market started with a pop and maintained it through the day despite Shanghai Composite trading down 5% before recovering to be up 1.6% at our market close. Shanghai Composite was down over 11% in less than 24 hours before recovering. If you are an outperforming Chinese fund manager, you are definitely earning your salary this week. We do expect Yuan devaluation to continue and reach over 10% in the next few months as US Fed moves up the interest rates. This will force other Asian and Commodity based countries to have to manipulate their currency to remain competitive as we saw with Vietnam dong today. The rate cut cycle in Australia is over after the recent currency move due to the asset bubble worries. China move will make USD even stronger and make US Fed think twice about putting up rates faster and higher. US Fed minutes will be out tonight and that will set the scene for interest rate outlook for US. (VIEW LINK)