Morning Report Friday 10 July 2015
**The S&P500 Futures is up ~1% this morning after reports of Greece agreeing to demands by its creditors this morning**
An Interesting week where we had major negative headlines around China and Greece and local medium term interest rates are generating sell signals = interest rates higher. As mentioned earlier in the week, short term interest rate markets are factoring in one more rate cut for Australia in the next 6 months to 1.75% but 3 and 10 year bond markets are saying that medium term rates are likely to trend higher. The savage 16% correction for CBA into May coincided almost exactly with an 0.66% increase in Australian 3 year bond yields – see charts 1 & 2. Last night, the International Monetary Fund (IMF) stated that “they see global growth at the lowest levels since the GFC”, yet bond yields rose as the market believes that the US commence raising rates imminently.
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