Aussie market started positive and then pulled back after solid inflation data and continued weaker China data. The Japanese negative rates and weaker US growth gave the Aussie market a strong lead while the strong inflation data reduced the probability of another rate cut and weaker China data created China growth doubts. The oil price may have topped in the short term as US gets back into the oil market after 40 year ban while the potential supply reduction agreement with OPEC and everyone else seems to be not going far. The more central banks deliver, the longer the growth will remain lower. The longer the low growth remains, the longer the yield trade will be the main thematic. Aussie market dividend yield to bond yield gap is the highest it has been in the back 15 years…including the GFC. (VIEW LINK)
Great stuff, loved your bit on the currency war.