Sunset Strip | Aussie Afternoon Institutional Market Wrap

Aussie market started negative on weaker commodities and the market went on with the negativity as US Fed decision is only a few days away. BOJ left rates on hold as they wait to see where the negative rates take them before making any more changes. The main game is US Fed and we are a few days away from it. PBOC, BOJ and ECB have thrown enough liquidity out there that the probability of a credit crunch is relatively small. The market expects US Fed to turn dovish, downgrade outlook and keep rates unchanged. Anything away from this will see markets move into profit taking mode. In all possibilities, US Fed will either hike rates or have to downgrade outlook to substantiate a dovish outlook. Either way the US markets are pricing in steady as she goes and we see substantial profit taking risk. The volatility indices in US and Australia are showing heightened risk of profit taking in the short term...…. (VIEW LINK)