Mathan Somasundaram

Sunset Strip | Aussie market continued the positive sentiment with global markets turning positive over the weekend. Global markets have had their correction they needed to have and now recovering on valuation support. We continue to expect the recovery to be similar to Jan/Feb recovery to previous high. Recent downgrades to growth outlook in almost every region will continue to drive global and local investors back to Aussie bonds and equity dividend yields due to the substantial yield premium to the rest of the world. We continue to feel that RBA is currently trying to curb asset prices (i.e. house prices, equity markets etc.) with inflation under control, so that they can cut rates in mid-2015 to stimulate a stagnant domestic economy. We are seeing more economists beginning to argue the case for a rate cut in 2015 with tidal wave of unemployment, rising cost of living and falling standard of living expected in the next 12-18 months. Trading idea of the day: CarSales.com (CRZ). Monday's Macro Stock Pick: Flight Centre (FLT) (VIEW LINK)



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