Share markets clawed back most of the losses recorded in May with major exchanges finishing strongly in the black. Fueled by the growing expectation of a Fed rate cut, the US market surged 6.9%, while Europe +4.7% and Japan +3.3% also posted solid returns. Mainland China improved 5.4% on hopes that trade talks with the US during the G20 summit in Osaka may avert an escalation in trade tensions. Following on from its stellar performance in May, the Australian market posted a respectable +3.2% to bring the full financial year return to an impressive +11.5%. A strong iron ore price boosted the major resource names with BHP & FMG both up 6.6% while interest rate sensitive listed real asset stocks such as SYD +8.8%, TCL +7.8% and GMG +10.8% were market stand outs. The local bond market continued its impressive run as expectations of further rate cuts by the RBA pushed the 10 year government bond yield down 15bp to another record low of 1.32% while the whiff of a rate cut propelled US 10 year treasuries yields 26bp lower to 2.01%. While local interest rate cuts would normally see a depreciation of the AUD, it has remained stubbornly high around the US 70c level supported by the burgeoning iron ore price which continues to be driven by supply disruption from Brazil.