Sure, commodities have had a strong run, however, we may soon see a resurging USD as investors move towards defensive assets.
The AUD/USD at $0.74 is still too high and the RBA has made it clear that they would like to see the currency closer to $0.65.
Business and Consumer confidence are key and with a lack of global direction and a potential downgrade by global credit ratings to cut AUS AAA rating, this can’t be a good thing.
Leading into the FY results in late July/August, all focus will be on cost cutting, rather than margin expansion.
This is a concern…
Dividends are unlikely to be raised and self managed super funds who are looking for yield and franking credits, may have to revert back to cash and fixed income.
An interesting month ahead…
The SPI is down 23 points this morning
Niv
Niv Dagan is an Executive Director of Melbourne based boutique funds management and corporate advisory firm, Peak Asset Management (www.peakassetmanagement.com.au). He is also a regular financial commentator on Sky Business.
