30/03/2016 - 06:06

Opinion: Yellen speaks… markets rally… Is a new trend forming?

30/03/2016 - 06:06


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For the first time in a long time, Janet Yellen speaks… markets rally… is a new trend forming? Doubtful. Although interest rates in the US aren’t going to rise anytime soon, we are still cautious on global growth… Australian banks now down 8% in two trading days… really? There is an opportunity forming…

Good Morning,

For the first time in a long time, Janet Yellen speaks… markets go up…

Previously, it was the other way around…

US Stocks are currently up +98 points, while the USD is lower, following Yellen’s admission that the US central bank should proceed "cautiously" as it looks to raise interest rates, because inflation has not yet proven durable against the backdrop of looming global risks to the US economy.

In her first comments since the Fed decided to hold rates steady two weeks ago, Yellen again pointed to threats to the world's biggest economy including low oil prices and concerns over China's economy.

As we were in China only a few weeks ago, we do tend to agree that GDP is closer to 6%, however, the economy over in China is definitely stabilising….

"Given the risks to the outlook, I consider it appropriate for the Committee to proceed cautiously in adjusting policy," Yellen said, referring to the policy-setting Federal Open Market Committee.

Ok, so it is clear that US interest rates wont rise any time soon….

But what is going on with our banking sector?

ANZ is now down more than 8% in two trading sessions, while other banks follow on concerns that their tightening of lending provisions will cause weaker credit growth…

We agree, however, an 8% drop is a big move….

We see support for ANZ around the $22.00 level, so keep an eye on this, if you are looking for an entry…

On another note, PEAK’s investment into Expert360 is going nicely… well done to Bridget and Emily…

A great Australian story.


The SPI is up 21 points this morning.



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.


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