Sunset Strip | Aussie Afternoon Institutional Market Wrap
Aussie market started very positive before giving it all up as market took profit before US Fed comments later tonight. RBA held its ground as we expected and flagged that banks are doing their dirty work on the property market. They can cut after the property bubble is deflated and the economy starts to deteriorate. The real rate cut cycle is over for property loans. We maintain our view from May 2014 that domestic housing bubble will burst in 2015H2/2016H1 period. The market will wait and see what happens tonight and then react. The most probable scenario is that US Fed talks up rate rise option while flagging that normalisation of rates will take 3-4 years. Retail data was as expected and provided some relief for retail sector, but the future looks bleak with GST rise almost certain. Small Cap continues to outperform Big Caps on month to date and year to date basis. If you want growth and yield, it is time to look past the usual candidates and go up the risk ladder to Small Caps. (VIEW LINK)
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