Top Trades for 2022: Short AUD, long Copper and Oil – Goldman Sachs

Heading towards 2022, Goldman Sachs strategists laid out the key themes and top trades to look forward to, in the face of a “lower-octane” phase of the worldwide recovery, per Bloomberg.

Key quotes

“Divergence in the outlook for monetary policies and risks to China’s expansion are among other key themes.”

“Among the top trade ideas are shorting the Australian dollar versus Canada’s currency. That’s partly on a bullish view on oil and Australia’s exposure to metals prices and downside risks to China’s economy. Australia is also expected to raise interest rates more slowly than Canada.”

“Advise buying US dollar five-year breakevens on a bet inflation will accelerate.”

“Recommend going long on copper and Brent oil contracts for the end of 2023, as those markets are cyclically tight, with the forwards “nowhere near the necessary incentive level for higher activity.”

Must read: Top commodities to trade amid global reflation: Silver and copper to outshine gold price