Equity Market Engineer | Road to low growth is paved with currency wars

Global market outlook: Global growth worries have driven the major economies back into a currency war to get a bigger share of the shrinking growth pie. US, Japan, China and Europe have gone down the path of currency devaluation and stimulus packages to stimulate their economy. The currency wars have forced a race to the bottom where the final result is likely to be lower global growth and lower inflation. We continue to see low global growth outlook and falling domestic currency to support our equity market recovery on the chase for yield. Market view: We maintain a bullish long term view on the Australian equity market while downgrading our 12 month index target level from 6100 to 5850 on growth recovery delays. US markets are showing technical signs of potential correction, but move by ECB and BOJ have removed the market fear in the short term. We see a real risk of substantial US correction during March to May period without US Fed action. (VIEW LINK)