Aussie market showed some strength today to finish slightly in the black despite negative global lead and weaker commodities. Commodities are in for a double hit as the Chinese government takes away the sugar hit that boosted Q1 growth while also squeezing the speculators out of the commodity market. The currency trend suggests that USD will strengthen from here. Stronger USD will be negative for commodities, AUDUSD and Aussie market. Commodities have been falling like “election promises” in the past few days and we expect that trend to continue. Oil might get some support short term due to the wild fire in Canada and the African unrest. The retail data and the housing data out today were positive. Given that we have not had any substantial negative data apart from the inflation for one quarter, RBA will have to explain tomorrow on why they moved in May. We are in the “Sell in May and Go Away” period for the US market and volatility index is pointing to profit taking. (VIEW LINK)
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