We have said before that Australia will be dancing with petrodollars in the years forward as the Arab Spring had taught the Middle East (ME) that the enemy is within. We speculated that the ME would be sending forth petrodollars to build up the desert to assuage the masses in the coming years. Another star had just aligned for it:
Saudi Mortgage Law Opens Kingdom to Home Lending Surge
“…Saudi Arabia’s mortgage law, approved two days ago after more than a decade of debate, will encourage banks to expand lending in a $16 billion market that now accounts for less than 4 percent of all home purchases. …”
This will inevitably bring about a construction boom that will likely ensure that Australia, the land of iron ore, will greatly benefit from. Australia had danced with Japan, and China. It’s time for her to dance with the ME.
For now, all eyes on ECB and NFP. If we get a LTRO, it will be a simple rally as bears get discouraged. Else expect a very volatile Jul as bulls and bears fight it out, with bulls likely victorious.
Good luck all.