HALISTER1: Goldman Adds Long Aussie Rates vs U.S.; Reduce USD, EMFX Holding

Goldman Adds Long Aussie Rates vs U.S.; Reduce USD, EMFX Holding

(Bloomberg) -- Goldman Sachs Asset Management added to its long Australian rates versus short U.S. position, maintain positions in U.S. TIPS and reduced exposure to both USD and emerging mkt currencies, according to note dated November 18.
  • Weakness in Australian rates amid the global sell-off is excessive
    • Stabilization in China and a rebound in commodity prices reduce likelihood of a near-term cut
    • Expects RBA to maintain an easing bias given compositional weakness of jobs growth and financial stability risks posed by the housing market
  • Maintain long U.S. TIPs in light of Trump’s fiscal, tax and trade policies, all of which are seen inflationary
    • Anti-global rhetoric driving trade and immigration policies may add inflationary pressures further out
  • Reduced exposure to both USD and EMFX, pending more clarity on Trump’s policy priorities; his victory and control of Congress has widened spectrum of possible outcomes in developed and EM mkts
    • Potential USD positive catalysts include increased spending, tax cuts, repatriation of overseas corporate profits and geopolitical concenrs
    • Within EMFX, reduce longs in MYR, increased shorts in KRW, SGD and TWD
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

To de-activate this alert, click here

UUID: 7947283