There was nothing unexpected in today’s RBA announcement (end of QE, rates on hold)…
…however the constellation of asset prices is still taking it as dovish, at the margin, with the AUD down…
risky assets up…
…and yields lower, all of which is consistent with expansionary monetary policy.
From a stock and sector perspective, tech, and consumer discretionary have outperformed, however that is arguably about international movements overnight, than the RBA specifically. Nonetheless, the common factor between both is the moderate retracement in real yields.
No change for us, we still expect rates to go up over time, and are avoiding the over-extended growth names. Our note earlier today on DAA positioning, provides some good, additional depth on our thinking.
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