Monday, February 27, 2012

Gillard and Rudd showdown complete AUD implications?

Gillard takes the hammer vote 70-31 or so, and Rudd steps back to the backbench - a much expected result, but AUD/USD is falling today staying below the 1.07 level.
Technically the AUD looks toppish for the short term, but how far can a sell-off really go given it's carry appeal and decent sentiment on risk markets?

Sentiment was better on Friday at 75.3 from 72.5, and housing broadly in line 321,000.

AIG closed up 1.5% (but well off it's 8% premarket rise) after 4Qtr earnings well above expected.  This is in trend with IAG which recently saw a huge move off it's 3 year lows after it's earnings.  Are insurance players about to get re-rated? I think so.. might need to look at QBE and a few others.

Consumer Discretionary still looks weak with Crocs off 5% after earnings and Walmart falling 5.9% for the week.  Let's not forget the horror story of Dell last week too.

On the energy front, oil is continuing to get a good run - and oil producers are definitely a good sector here even if we see a correction, we should see oil producers hold the line a lot better.

This week we have G-20, China PMI and LTRO.