15 Oct 2013
Flash: AUD or USD? - BAML
FXstreet.com (London) - Bin Gao, analyst at Bank of America Merrill Lynch, noted the AUD against the USD.
Key Quotes:
“The AUD front end curve is steeper than that of the USD curve, presenting a big anomaly in the market”
“The strong AUD and 60bp RMBA rate hike priced in by 2014 and low CNY vol demands a strong Australia fundamental and /pr China to remain in low risk under the old growth model, too strong an assumption in our view”.
“We like receive AUD rate against either pay USD rates or short AUD/CNY. We also like owning 1y CNH straddle as way to hedge China risk”.
Key Quotes:
“The AUD front end curve is steeper than that of the USD curve, presenting a big anomaly in the market”
“The strong AUD and 60bp RMBA rate hike priced in by 2014 and low CNY vol demands a strong Australia fundamental and /pr China to remain in low risk under the old growth model, too strong an assumption in our view”.
“We like receive AUD rate against either pay USD rates or short AUD/CNY. We also like owning 1y CNH straddle as way to hedge China risk”.