Sunset Strip | Aussie market holding up better than global sentiment with Greece/Euro plans and negative China data

Sunset Strip | Aussie market holding up better than global sentiment with Greece/Euro plans and negative China data. Global short covering seems to have been done and now the market looks stretched with rising global risks and domestic reporting season risks. The currency has already bounced back to what it was before the rate cut. The issue most currency traders and we have with the RBA is not with the move, but the lack of guidance. Assuming what they have guided to now is what they are seeing, we see RBA making more cuts to take rates below 2% in the next 12mths. Equity markets with sustainable dividend yield above 4% fully franked will continue to experience higher prices on relative return basis. We maintain our long term view of the market running to 6500 by 2016 on dividend yield thematic. But in the short term, the market likely to experience profit taking to let some steam off. Stay nimble, RBA will be under pressure to act again next month after their commentary. (VIEW LINK)