The China growth story, which has been driving commodity prices, remains as strong as ever,

The Chinese economy continues to motor along at a pretty solid pace. There has been a bit of a rebalancing of the economy over the past few years away from fixed-asset investment toward the consumer.

The general picture is for a substantial performance in Asian shares as consumer spending in Japan and China, in particular, fuels profit growth.

The homes sales data is more important, because if the market continues to slow, that will ultimately take pressure off the U.S. Fed Reserve.

The housing market remains in the doldrums. With the housing market still slowing and households under pressure from high petrol prices, interest rates will remain on hold.

Cheap products from China and a very competitive pricing environment is helping keep underlying inflation in check. Interest rates are on hold for the time being.

Interest rates globally are putting some pressure on financial stocks. It's quite possible we go through a bit of a correction in share markets around the world.

In corporate debt, you have the credit risk of borrower defaulting and that's why people rely on the rating agencies to provide a guide on the default risk, and the other risk is that there could be a blow out in yields, for instance, you buy a portfolio and inflation takes off or companies go bust.

Slowing housing, weak consumer spending and benign underlying inflation give the bank plenty of reasons to leave interest rates right where they are. Fuel prices are up, but thanks to an extremely competitive retail environment and cheap imports, prices for a whole range of items remain weak.

An upside risk for Australian shares though is that a bubble forms on the back of enthusiasm for China and resources stocks.