AUSTRALIA FOCUS : A NERVOUS CALM
“if there isn’t a 10 per cent fall or a technical correction in stocks between now and August, they will post the third-longest bull market since 1937.” http://www.afr.com/markets/equity-markets/value-investors-nervous-as-asx200-on-the-brink-20150626-ghuk41
BLOOMBERG : “The correlation between the nation’s benchmark stock gauge and the Bloomberg AusBond index of Australian federal notes last month turned positive for the first time in 15 months. That correspondence has been negative for the majority of the past two decades.”
IMF: AUSTRALIA RISKS LOWER POTENTIAL GROWTH WITHOUT REFORM
It does not help that the ASX200 is 47.57% weighted to financials when the banking sector is under fire for capitalisations, tightening margins and over exposure to housing.
http://www.wsj.com/articles/aggressive-lending-may-haunt-australian-banks-1435166256?mod=e2tw
Not to mention the brewing scandal in Malaysia on those Melbourne properties and the potential graft involved. http://www.bloomberg.com/news/articles/2015-06-24/malaysia-s-najib-to-probe-melbourne-property-graft-allegations
A nervous sort of calm, I would imagine yet not all is lost because we still have another 2% to go before zero rates and a cloudy economic outlook. https://tradehaven.net/market/fx/australia-focus-cloudy-with-a-chance-of-more-clouds/
And Berkshire should be there waiting for the crash to buy his Australian bank. http://www.newsmax.com/Finance/Companies/warren-buffett-berkshire-hathaway-iag-insurance/2015/06/17/id/650899/
Bonds would be ok and that is what we saw this week, with a bunch of state govt issues and a Rabobank sub debt, in time for the higher rates we are seeing. Demand for Aussie assets remain good as China Construction Bank buys over RBS’s AUD loan portfolio. http://www.bloomberg.com/news/articles/2015-06-25/china-construction-bank-buying-about-a-2-billion-of-rbs-loans
As for the currency, the AUD is more a victim of global swings. The EURAUD took centrestage for the week as the AUDUSD weakened within its range. For the week ahead, Greece and China will remain the main determinants of currency direction before the RBA on the 7th of July. Tony Abbott will be visiting Singapore too, tomorrow 28th June.
How exciting can it be ?
Leaving with the indicative prices.
