Quarterly Outlook
Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges
Althea Spinozzi
Head of Fixed Income Strategy
Access both platforms from your single Saxo account.
Going long the Australian dollar
Trade View
Medium Term / Buy
John J. Hardy
Chief Macro Strategist
Instrument: AUDUSD
Price Target: 0.7700 and 0.7800
Market Price: 0.7422
Background:
Iron ore prices have jumped again, up some 20% from the range this spring and despite all of the trade war rhetoric. This is Australia’s largest single commodity export, most of it going to China. If China is set to launch another round of stimulus to stave off the risk of its recent deleveraging attempts leading to a hard landing, Australia’s currency would benefit from the injection of fresh cash and mining activity.
Already, Australia’s terms of trade have improved remarkably in recent years relative to its history of running large deficits, even as iron ore prices have been in a slump until recently.
Parameters:
Entry: 0.74225
Stop: 0.7325
Target: 0.7700
Time Horizon: Medium-term
Global risk appetite is improving. Our Global Risk Indicator appears to be moving back into positive territory for now after getting mired in the negative since early February – and within the G10, AUD is the classic proxy for risk appetite. Global risk has receive an additional boost from China’s move to stem the weakness in its currency before the official RMB basket reached new lows and before USDCNY threatened the 7.00 level.
See relevant charts below for more.
Management And Risk Description:
The long term downside risks to Australia include the eventual risk that tightening lending standards will deal a blow to economic growth via a traditional credit crunch, but this risk could be beyond the horizon of a short- to medium-term change of attitude for the better on the Aussie’s prospects.
Latest Market Insights
Quarterly Outlook
-
-
Quarterly Outlook
Equity Outlook: Will lower rates lift all boats in equities?
Peter Garnry
Chief Investment Strategist
After a period of historically high equity index concentration driven by the 'Magnificent Seven' sto... -
Quarterly Outlook
FX Outlook: USD in limbo amid political and policy jitters
Charu Chanana
Chief Investment Strategist
As we enter the final quarter of 2024, currency markets are set for heightened turbulence due to US ... -
Quarterly Outlook
Macro Outlook: The US rate cut cycle has begun
Peter Garnry
Chief Investment Strategist
The Fed started the US rate cut cycle in Q3 and in this macro outlook we will explore how the rate c... -
Quarterly Outlook
Commodity Outlook: Gold and silver continue to shine bright
Ole Hansen
Head of Commodity Strategy
-
Quarterly Outlook
FX: Risk-on currencies to surge against havens
Charu Chanana
Chief Investment Strategist
Explore the outlook for USD, AUD, NZD, and EM carry trades as risk-on currencies are set to outperfo... -
Quarterly Outlook
Equities: Are we blowing bubbles again
Peter Garnry
Chief Investment Strategist
Explore key trends and opportunities in European equities and electrification theme as market dynami... -
Quarterly Outlook
Macro: Sandcastle economics
Peter Garnry
Chief Investment Strategist
Explore the "two-lane economy," European equities, energy commodities, and the impact of US fiscal p... -
Quarterly Outlook
Bonds: What to do until inflation stabilises
Althea Spinozzi
Head of Fixed Income Strategy
Discover strategies for managing bonds as US and European yields remain rangebound due to uncertain ... -
Quarterly Outlook
Commodities: Energy and grains in focus as metals pause
Ole Hansen
Head of Commodity Strategy
Energy and grains to shine as metals pause. Discover key trends and market drivers for commodities i...
Disclaimer