Aussie market started slightly negative and went south very quickly before halving the losses. US markets recovering to close nearly flat and solid CBA result in a tough environment offered hope for positive day but the global worry has the investors spooked. We saw the market move below long term fair value for the third time in over 13 years. The market is jumping on shadows and we still don’t see the trigger point. US Fed’s Janet Yellen will deliver her semi-annual monetary policy report to Congress tonight. Given the direct and indirect risk to US economy and the global banking system, Yellen is likely to be bullied into a measured response while guiding towards data dependency. This should alleviate the risk in the US Fed view of 4 rises in 2016 and the market view of 2 rises. Never underestimate the illogical state of panic in markets and also the drive for massive bargain hunting when sentiment turns….we will have movement tomorrow!!! (VIEW LINK)
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