Australian markets, equities and currency did attempt to lift yesterday. Largely on a 'buy the fact' trader basis, but there was also a bounce in markets generally.

Also that all important hope for an end to the previous red-neck foreign policy toward China. That does not mean important geo-security issues can be ignored. Simply that there is a more mature and reasoned way of communicating unsettlement and disagreement, than grand standing at the UN Prime Ministers address as occurred previously.

Even President Biden is today talking of reconsidering the Trump era sanctions against China. It makes no sense at all for Australia, with China as our major trading partner, to continue to be unduly aggressive.

Things will not change overnight. There has been significant damage in relations in both directions, but today’s news of the first Ministerial communication from China to congratulate Anthony Albanese and to suggest an open door to discussions again is significant. This is a seismic shift and the Albanese government should take care to make the most of this window opening.

We can make our arguments on all issues with China in a way that gets a good hearing and is well received.

Markets

As suspected yesterday, the immediate Australian bounce for currency and stocks looks to be tiring a little. Albeit after some further initial strength in overseas markets.

The strongest looking major market at the moment looks to be Gold. Making steady gains indeed over the past week.

While the more vulnerable of the major global markets, remains the US stock market. The SP500 index was already rolling over again at the New York close.

This appears to be a general global market shift of pulling back from recent risk-off behaviour, but now again beginning to fall back into that bearish equity markets dominance overall.

Clifford Bennett

ACY Securities Chief Economist. The view expressed within this document are solely that of Clifford Bennett’s and do not represent the views of ACY Securities. All commentary is on the record and may be quoted without further permission required from ACY Securities or Clifford Bennett.

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