We see short term profit taking risk in the market after trading above post GFC premium valuation level (i.e. 5900) with yield trade being squeezed by rising global macro risks and local bond yields. Global macro worries such as China slow down, Greece exit from EU and rising inflation in the US are beginning to test the inflated valuation of the local market with May rate cut hope under pressure after astonishing employment data last week. The RBA will be better served to keep the rate cuts to stimulate the economy after the budget. We expect the budget to deliver more problems than solutions. The RBA is unlikely to further fuel the asset bubbles in an effort to stimulate a benign job market that is heading for high unemployment. SHIELD Top 20 picks are: large cap – CBA, WBC, ANZ, NAB and TLS; mid cap – AWC; small cap – IMF, SGN, SGF, RCR, PTM, DSH and AFJ; and micro cap – FRI, DDR, HFA and VTG. (VIEW LINK)