Trade / BOP

In this <i>Insight</i>, we revisit our long AUD trades, after the upgrade from our attractiveness ranking last week.

We are pushing back the anticipated start date for a Eurozone recession and assessing how it affects our equity stance.

In this insight, we provide an update on the Norwegian krone, with attractive trade ideas over a long-term horizon. Shorter-term, our neutral-to-positive view on the dollar keeps us on the sidelines for USD/NOK.

Despite the economy being on the verge of a recession, the South African Reserve Bank will not ease policy meaningfully. Doing so will accentuate the currency depreciation, which, in turn, will push up bond yields – an outcome the central bank would like to prevent.

Over the next six months, the deterioration in non-US growth will occur earlier and be more pronounced than in the US. This expectation reinforces our confidence to bet on the strength of the US dollar. As usual, the flip side of the US dollar strength will be weakness in EM risk assets.

The German economy has lagged that of Europe. This trend will continue, but does it mean German equities will underperform further?