Sunset Strip | Aussie Afternoon Institutional Market Wrap

Aussie market delivered the fifth straight positive day as US markets gave a solid sentiment on oil price bounce. The market opened up around 1.5% higher before giving up two-third the gains as the optimism waned on stretched multiples. The market was trading at 12 year high forward multiple when the market hit 5400. The current growth multiples will have to move higher to support that or we need to see another cut in rates. Given that an upgrade cycle and/or rate cut were already in the price, market started to pullback as the day went on. ANZ has already gone ex div, WBC turns ex div tomorrow while NAB and MQG turn ex div next Tuesday. The US market, US currency and commodity risk remains key on global basis while local employment data next week will set the RBA expectations for the following month. We continue to support the yield trade due to low growth and Gold as the safety trade. (VIEW LINK)