AUSTRALIA FOCUS : STILL THE FAVOURED CHILD
I misread the headlines as usual so it was a 14 consecutive yearly loss for the Wallabies against the All Blacks for the Bledisloe Cup yesterday as the AUD closed the week surprisingly civilised given the Great China Deval.
The RBA signaled an end to rate cuts the week before but I am not so sure now that China has shown their hand and property prices look like they are finally going to slow with analysts and developers calling a peak.
Australia stands tall at no. 2 on percentage exports to China, if we assume that the deval would temper demand.
Well, we know that Australia is still the favoured child when a Chinese tycoon buys the most expensive home ever sold in Australia without even viewing it.
And the seller’s, James Packer, Crown casino business is moving fast into “credit negative” zone as borrowings continue to rise amid falling profits according to Bloomberg.
With more bad news on the weather, 2015’s El Nino expected to last into 2016, and expectations that India would not need Australian coal in 5 years time, we would surely expect bond prices to stay supported for the time being ?
But the big 4 banks continue on their capital boost, raising US$11.8 bio since May this year with CBA the latest to announce a A$5 bio capital plan this week, as *S&P CUTS RATINGS ON SEVEN NEW ZEALAND FINANCIAL INSTITUTIONS but sparing the Aussie names – *S&P: AUST 4 MAJOR BANK RTGS UNFFCTD BY HIGHER NZ RISK.
And the currency looks supported too, at the moment along with Iron Ore, with the weekly chart looking favourable for intraday longs and trading on the long side against the USD and against the short AUD positions. 0.76 looks like a decent target against the 0.7250 support after missing the AUDSGD train (now at 1.03).
The RBA minutes on 930 AM (SG time) Tuesday next week would be a good day to get some trading in.
Leaving with the indicative prices.