Sunset Strip | Aussie Afternoon Institutional Market Wrap

Aussie market was hammered on weak global market and commodities sentiment. After the recent China data showed that the Q1 sugar hit to boost growth was beginning to dissipate and the commodities were sitting on speculator support. Commodities were falling overnight like “election promises”. Iron Ore futures are now one of the most traded markets. Oil has been over priced on supply deal hopes for the past few months. Both of these have high risk of pulling back hard. Naturally all commodity country currencies like AUDUSD were dragged down as pessimism fed through. Time to be patient and pick the time to buy-in or add more exposure…maintain medium to long term view > long Yield and Gold, short Iron Ore and Oil. May has historically been a negative month. Stretched valuations and lack of positive catalyst means that the markets are highly prone to repeat history and take profit in May as banks and commodities underperform. (VIEW LINK)