Here we are tracking the coming floor in AUD ... I would highly recommend those wanting to dig deeper into the Australian domestic and fundamental reasons behind this move to see the attached charts from the archive as we will not be covering that here today.
Copper is finding a bid as the Dollar devaluation kicks in...interest rate differentials are beginning to reflect markets are now starting to price 50bps cut as early as July which will be enough to keep the commodity rally alive. AUD will be a large winner here with iron ore surging to record high prices (in Aussia terms).
The risk to the thesis is coming from headwinds on the supply side of iron ore... Brazil are coming back into the game later in the year (see attached for BRLMXN: Trade of the Year) and will mean timing wise we have till 2020 to complete the moves back towards 0.80x in AUD.
Copper is finding a bid as the Dollar devaluation kicks in...interest rate differentials are beginning to reflect markets are now starting to price 50bps cut as early as July which will be enough to keep the commodity rally alive. AUD will be a large winner here with iron ore surging to record high prices (in Aussia terms).
The risk to the thesis is coming from headwinds on the supply side of iron ore... Brazil are coming back into the game later in the year (see attached for BRLMXN: Trade of the Year) and will mean timing wise we have till 2020 to complete the moves back towards 0.80x in AUD.
