Australia in Focus : Antipodean Finals

Australia just booked the final spot in the World Cup Cricket against none other than New Zealand, the alternative being South Africa, which makes it a perfect Antipodean finish or, would have been, battle of the southern hemispheres.

Not sure about the results because AUDNZD hit a historic low on Friday.


Otherwise it’s been a glum week for the miners again as iron ore prices head to a 6 year low (since official record keeping began) for a record quarterly loss and we can expect more belt tightening to come as companies slash costs (mine closures, asset sales and job cuts) to tide through the downturn.


I do not think there is much view in the marketplace for the AUD at the moment as we head into the second quarter of 2015. We shall have the US employment numbers next week dominating along with lots of Fed speeches that will undoubtedly cause some volatility along with more Grexit worries if  Greece does not deliver their reforms package early in the week, as they had promised.

RBA is widely expected to cut rates on their meeting on  7th of April (61% chance) and again before the first half is through. Bond yields fell to a record low before selling off into the weekend. And I am personally not sure about the rate cut when real estate risks are still on the rise, according to the RBA.

(Bloomberg) — Australia’s central bank said easy monetary policy globally is spurring demand for the nation’s office buildings, even as vacancies climb and rents fall, raising risks of a future price slump.
“Prices have continued to rise at a national level, driven in particular by investors’ search for yield in the global environment of low interest rates and ample liquidity, with the lower Australian dollar also likely to be adding some impetus to foreign demand,” the central bank said Wednesday in Sydney. “The risk of a large repricing and associated market dislocation in the commercial property sector has increased.”
It would appear that the central bank is acknowledging that the situation is outside their control and coming from loose monetary policies around the world.
Stocks will have the best quarterly close in 5 years, along with bonds. Not a bad time to take chips off the table, I think, or put some hedges on.
On the currency front, we are seeing higher lows for AUDCAD and AUDSGD but given that the AUDUSD closed off the week at its lows, I think we are still stuck in the range of 0.75-0.80.


Leaving with the indicative prices and a note to reader Peter that I have included VTB at the end of the list.
aud bonds