Australia

In this Special Report, we evaluate future prospects for the Australian dollar and Australian government bonds. The currency remains fundamentally cheap, and positioning is very short, but the AUD will continue to underperform in the near-term due to sluggish global growth. Australian government bonds have had a nice run of outperformance over the past year, but it is now time to take profits with given the uncertainty that the RBA will deliver the rate cuts currently discounted.

In this Special Report, we present our updated Central Bank Monitors for the US, Canada, Australia, New Zealand and Japan. We have improved the methodology used to calculate the monitors to make them more dynamic to structural changes over time. The main message from the Monitors is consistent across all five countries. The pressure to hike rates is diminishing, suggesting that the end of tightening cycles is approaching, but it is still too soon to expect rate cuts.

Great Power Rivalry is taking another leg up as Russia and China further align their geopolitical interests. Investors should stay long USD-CNY, favor defensives over cyclicals, and markets like North America and DM Europe that have less exposure to geopolitical risk. 

In this Strategy Insight, we go over the RBA’s recent decision and the implications of its hawkish message for AUD trades.

In this Strategy Insight, we go over the RBA’s recent decision and the implications of its hawkish message for AUD trades.

This week, we articulate what the actions of the three major central banks that met (Fed, ECB and BoE) mean for currency markets. This is within the context of our analysis of the latest data releases in the G10, that allows us to calibrate currency strategy.