1 May 2015
Still bearish on the antipodeans – SG
FXStreet (Barcelona) - The Team at Societe Generale, maintain their bearish outlook on AUD/USD and NZD/USD due to global growth risk and the expected lift-off by Fed, and further remaining short EUR/NOK while expecting oil prices to bounce.
Key Quotes
‘Real’ fed funds won’t go up quickly from here, and indeed, if the PCE deflator moves a bit higher before the Fed finally gets round to raising rates, they can go negative again. But I do think the cycle has turned. Again, check Mr Edwards for an alternative view as desperate central banks try to prop up a failing global economy.”
“I also think the medium-term outlook for global growth is modest at best, and with China re-balancing from exports to consumption, commodities are at best in a trading range.”
“The Australian dollar is, in real terms, still 33% more expensive now than it was back in August 1998, and 11% higher than it was when the Fed finally got the rate-hiking cycle underway in 2004.”
“If we’re going to trade rising commodity prices, we’d rather do it by embracing the idea of a further bounce in oil prices, sticking with short EUR/NOK and eschewing the temptation to go long USD/CAD just yet.”
“Short AUD/USD and short NZD/USD to take advantage of a modest global growth outlook and the risk – still not gone away – that Fed rate hikes cause stress for international dollar borrowers, still appeals.”
Key Quotes
‘Real’ fed funds won’t go up quickly from here, and indeed, if the PCE deflator moves a bit higher before the Fed finally gets round to raising rates, they can go negative again. But I do think the cycle has turned. Again, check Mr Edwards for an alternative view as desperate central banks try to prop up a failing global economy.”
“I also think the medium-term outlook for global growth is modest at best, and with China re-balancing from exports to consumption, commodities are at best in a trading range.”
“The Australian dollar is, in real terms, still 33% more expensive now than it was back in August 1998, and 11% higher than it was when the Fed finally got the rate-hiking cycle underway in 2004.”
“If we’re going to trade rising commodity prices, we’d rather do it by embracing the idea of a further bounce in oil prices, sticking with short EUR/NOK and eschewing the temptation to go long USD/CAD just yet.”
“Short AUD/USD and short NZD/USD to take advantage of a modest global growth outlook and the risk – still not gone away – that Fed rate hikes cause stress for international dollar borrowers, still appeals.”