John Robertson

Heavily oversold markets appeared to stabilise at the end of last week but the primary sources of nervousness remain. Exchange rates and high yield bond prices are two of the key market features having a drag on market outcomes and with an impact on the resources sector – both negative. There are good reasons to use high yield prices as a guidepost to resource sector outcomes. A feature of last week’s market price action was the recovery in high yield bond prices after a sharp mid-week sell-off (along with other assets). This should help consolidate the reduction in resource sector volatility (outside the largest sector companies). This was addressed in this week’s PortfolioDirect investment report: (VIEW LINK)


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