Sunset Strip | Aussie Afternoon Institutional Market Wrap

Aussie market opened positive with Greek deal getting approved and then pulled back with some profit taking over the day. It would be naïve to think that Grexit will never come back. Greece is going experience prolonged austerity with high unemployment, lower benefits and rising costs. In this environment, we may revisit Grexit in some 6-12mth from now. Chiquities are stabilising with government management in play and more stocks coming off suspension. Chiquities are going higher to satisfy domestic investors, but global investors are unlikely to come back after recent intervention. US Fed really did not add much more than what we knew already. The big unexpected move that drove the currency below 74 cents was Canada cutting rates. Canada already had a negative growth quarter and their interest rates are now down to 0.50%. We don’t think Australia is going to go down that far, but assuming above trend growth for the next few years in Australia is “Crazy Talk”!!! (VIEW LINK)