Sunset Strip | Aussie Afternoon Institutional Market Wrap
Aussie market fell hard on the open and then finished substantially in the red despite a few bounces intra-day on solid GDP data and Chinese PMI data. Chinese manufacturing PMI was just in the expansion territory and conveniently met expectations. Aussie GDP was expected to be strong, but it was stronger than even the optimistic forecaster. The market got over that relatively quickly as the main drivers were resource sector volume ramp up getting the one-off free kick from the high commodity prices driven by China stimulus. Market read through the fact that resource sector production cycle will be less supportive in the following quarters while consumer spending and housing are likely to be weaker going forwards. The positive signal in the Aussie economy is the early signs of business lending picking up. The GDP data removes the RBA rate cut till the next inflation data in July while US Fed move may curb RBA action in the medium term!!! (VIEW LINK)
8 topics