Sunset Strip | Aussie Afternoon Institutional Market Wrap

Aussie market started negative again and then muscled its way back to positive territory with Energy sector leading the way after STO announced a rejected take-over bid. But at the end of the day CBA followed WBC lead and put up variable rates by 15bps. Bubble or not, everyone agrees that the property market will have a correction when the rates go up. RBA is not going to cut rates unless things deteriorate substantially while the banks putting up property loan interest rates and maintaining savings rate should be exactly what RBA wants. Canada overnight kept their rates at 0.5% while cutting growth rates down to 1% in 2015, 2% in 2016 and 2.5% in 2017. Australia is very similar in many ways to Canada and it would be naïve to think that we won’t see downgrades to our growth outlook in mid-year budget update in December. US existing home sales and jobless as well as ECB get together updates tonight will keep markets entertained. (VIEW LINK)