One positive supply shock, four implications, and 10 FX trades:
For the fifth time, we present our year-end FX Top Trades for the coming year.
This year's trade ideas are based on the view that the global economy will face very low inflation in 2014 primarily due to falling commodity prices and plenty of spare capacity in most economies. The low inflation will work as a positive supply shock to the global economy and should have a number of implications that, in our view, will drive the FX market in 2014.
The positive supply shock will (i) support the global growth recovery, (ii) put focus on relative monetary policy as global central banks will react differently to the low inflation, (iii) put focus on alternative monetary policy tools as interest rates have already reached zero in many countries, and finally (iv) underline that investors will have an EM and commodity scare as developed markets will be favoured over emerging markets and not least commodity-producing countries.
FX Top Trades 2014
1: Short EUR/USD via long USD/CHF
2: Bullish USD/JPY straddle
3: Short EUR/GBP
4: Bearish EUR/SEK seagull
5: Bearish EUR/NOK risk reversal
6: Bullish EUR/CZK ratio forward
7: Short AUD and CAD vs USD
8: Long TRY/DKK
9: Sell 12M USD/CNH
10: Long RON/PLN
To Read the Entire Report Please Click on the pdf File Below.
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FX Top Trades 2014: How To Position For The Coming Year
Published 12/09/2013, 04:59 AM
Updated 05/14/2017, 06:45 AM
FX Top Trades 2014: How To Position For The Coming Year
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Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
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