31 Jul 2013
Flash: CHF outperforms vs. AUD – BMO Capital Markets
FXstreet.com (New York) - Within RBS Stevens’ recent remarks, neither the idea that the current outlook for inflation provides scope for further monetary easing nor the notion that the resource investment spending glut is set to be a persistent drag on GDP growth mark anything new for the RBA, notes Stephen Gallo at BMO Capital Markets.
Key quotes
As such, “this left us being intrigued by the CHF’s outperformance versus the AUD during the London morning. The FX market has a tendency to believe policy makers typically know a lot of dark and nasty secrets market participants aren’t privy to.”
“Taken alongside recent Chinese remarks about potential new stimulus, demand for a traditional safe haven like the CHF could indicate FX is broadly leaning towards the risks of new, downside surprises from China.”
Key quotes
As such, “this left us being intrigued by the CHF’s outperformance versus the AUD during the London morning. The FX market has a tendency to believe policy makers typically know a lot of dark and nasty secrets market participants aren’t privy to.”
“Taken alongside recent Chinese remarks about potential new stimulus, demand for a traditional safe haven like the CHF could indicate FX is broadly leaning towards the risks of new, downside surprises from China.”