Mathan Somasundaram

Aussie market jumped out of the blocks on US sentiment and Oil price recovery. RBA minutes were as clear as mud. Three of the major four banks and MQG are now trading ex div while the market is trading at stretched multiples with very little chance of another rate cut in June or July. Domestic data of importance coming out next is the monthly ABS employment “fantasy” update on Thursday. It could be just about anything. The Aussie 10 year bond yield got down to 2.20% yesterday. Given the RBA will be on hold for a few months, negative bias by ECB and the likelihood of US Fed pushing back, the downside risk from US pull back is likely to be less than 5% for the Aussie market as AUDUSD is likely to rise from here. As the market pulls back slightly, buy into the market while everyone else is scared!!! FOMO will come after this pullback as rates are going to remain low for longer than market expects!!! (VIEW LINK)


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