The scenerios below (from BT) are the 3 most likely events (and results) to occur in Australia and the world over the next 6 months.
1. Inflation scenario (25% chance): - inflation picks up - stockmarkets contract - Australian interest rates rise - Commodity prices rise - Australian dollar rises
2. Structural problem scenario (25% chance): - Sharemarkets fall - Australian dollar rises (versus USD) - Commodity prices fall - Australian interest rates fall
3. Reasonable growth current int/rate (50% chance): - sharemarkets rise - Australian dollar falls (as USD rises) - Commodity prices rise - Interest rates remain flat
This leads me to a view that it is favourable to buy exporting producing domestic resource stocks for the medium term.