Three market moves that matter in 2015

Three market moves that matter in 2015. On the one hand we have entered an extreme rate cutting environment, but on the other, investors remain parched for yield. What are we seeing from here? 1. Reserve Bank cuts will continue - we're expecting at least another 50 basis points this year, with a high probability of more. While the Australian currency will decline further in the coming months, the fall won't be low enough to satisfy the Reserve Bank or market participants as central banks globally race to push their currencies to the bottom to stoke domestic demand. 2. Bonds won't behave the way you think they will - the consensus is that bond yields will rise materially throughout 2015. We disagree. We expect a rally in the first half of this year, maybe entering a bit of weakness in the second half. 3. Liquidity will be a problem - we are positive on a number of areas in the credit market, but believe there may be major liquidity issues down the track. More from Vimal Gor here (VIEW LINK)