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Join Peter Esho as he details the key market events for the week ahead and the critical macro economic data for the week starting 11th of May 2015. All eyes will be on the Australian government this week as they release their budgets. We saw the Reserve bank surprisingly cut interest rates last week and the impact on the market was a higher Australian dollar and a lower share market. Now that is very important this week because the fiscal situation is revealed and we suspect that the Reserve Bank move last week in anticipation of a larger than expected Australian fiscal of budget blowout. That will be interesting to watch on Tuesday, Tuesday evening Asian time. All eyes will be on the projections around the Iron ore price and what the Government will do in terms of reigning in the weaker than expected deficit. The Government has made clear that this budget would not be as hard in terms of cuts as was the case last year and so the market will really want to see where the savings will come from and what role the Reserve Bank needs to play in offsetting and balancing out the Australian economy. Now on the Reserve Bank as I said earlier we have seen the Australian dollar bounced was very important and perhaps even more important than the fiscal budget and the lying number is the increase in the Australian Government bond yields. Bond traders are starting to sell down bonds and we see an elevation in yield. We are seeing the 10 year note moved up towards that 3% range and that is very important because that sends a signal out there to the market that at 3%, the Australian 10 year note is in line where with the upper end of the RBA's inflation range. And also in line with where Australia's GDP growth has average since the second World War. It is sending a signal to the market that bond traders are taking a view that the Reserve Bank's cuts have finished an interest rate might start to rise over the next 2 or 3 years. We are seeing the fallout on the stock market. We are seeing the fallout on Australian banks and Invast actually wrote quite extensively in April on the Australian market. We quoted the top 80 stocks with a very strong focus on the Australian banks in particular the top 4. We are seeing the top 4 starting to come off from record high levels and in light of that, we really need to start seeing the material stocks push through and carry the rest of the market with it. We have not seen that and that is why the ASX200 is trending lower finding very strong resistance at that 6000 level and the 5800 support level has somewhat given way. So plenty going on this week. Plenty in Australia. No doubt that the UK election very important for the Pound and Europe remains undeterred from moving away from its stimulus package, its quantitative easing. The US data continues to be softish but our focus will be on the Australian dollar, the Australian rising bond yields and the implications for the Reserve Bank. GRAB A 4 WEEK INVAST INSIGHTS FREE TRIAL (WEEKLY NEWSLETTER) http://invast.com.au/insights CONNECT WITH INVAST TODAY Facebook ► https://www.facebook.com/invastglobal Twitter ► http://twitter.com/InvastGlobal Linkedin ► http://www.linkedin.com/company/invast Invast ► http://www.invast.com.au Google+ ► https://plus.google.com/+InvastAu/
