Aussie market started negative and soon went very negative as the bank sector took a bashing in line with recent global bank selloff regarding fears in funding costs and liquidity. BOQ update today did not help to improve market sentiment on banks. US Fed’s Janet Yellen will deliver her semi-annual monetary policy report to Congress on early Thursday morning Sydney time. Today’s trading suggests that market was worried and has already punished the sector for a negative result. If the market has trust that the banks can maintain dividend yield (i.e. on average nearly 10% grossed up), bank sector will bounce on the result. Assuming the markets overnight don’t paint more pain, we should be dependent on CBA result tomorrow and then US Fed on Thursday. Our market is approximately down 20% from the highs about 12mth ago while US market is down 12% and AUDUSD is down 10% in the same time. Wish we lived in more boring times… (VIEW LINK)
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