RBA delivers. Postprandials, Tuesday Evening, 3 February, 2015....

RBA delivers. Postprandials, Tuesday Evening, 3 February, 2015.

XJO finished up +1.5% after being negative at 2.00 p.m.



The RBA announced an interest rate cut at 2.30 p.m. and our market took off.

Until then, it was more or less following the script I'd laid out previously. The market hit overhead resistance after being up early, then retreated from that resistance level. At 2.00 p.m. almost all sectors of the market (except Energy) were in negative territory - but the RBA decision turned the market around.

It seems that most people were expecting either an interest rate rise or no change. But the ASX 30 Day Interbank Cash Rate Futures suggested otherwise:



The smart money was on an interest rate cut - and that's how it panned out.

The only sector that didn't show a big improvement at the 2.30 p.m. time slot was energy. But it had already had a huge rise and finished up +4.1% on the day. That was after a very positive performance in America last night +3.95%.

So, the benchmark Australian index (XJO) finished up very strongly +1.5%, how did International Shares on the Australian market finish today? Following are two ETFs that I featured in my Weekly Report on Sunday, IOO (100 Top International Shares and IEM (Emerging markets):



IOO was up more strongly than the Australian market, +2.43%. Technically, the stock looks overbought and could be in a bearish rising wedge.



IEM was up more strongly than the XJO, +2.17%.

The out-performance by the International Shares and the Emerging Markets can be attributed largely to the currency effect. The Australian Dollar fell heavily today against the U.S.$ as a result of the RBA decision. The increase in the U.S.$ was around+1.35%. (Tough if you want an overseas holiday, or an importer of overseas goods.) But - at this stage, a bet on international shares is a bet on further falls in the Ozzie Dollar.

Redbacka