Nordea have entered a long AUD/USD...........>

AUSSIE: Nordea have entered a long AUD/USD position targeting $0.7225.

- Nordea write "a weaker CPI trend in Australia is mostly a lagged consequence

of the tighter financial conditions in Asia in 2018. The softer financial

conditions seen throughout 2019 will likely soon spill-over to a re-increase in

the Australian CPI. Easier conditions in Asia lead to a slight rebound in metal

prices, which shows up in the domestic price pressure in Australia with a lag.

We bet that the Q2 inflation report will be more upbeat than the Q1 report that

we received last week. The highly certain influx of USD liquidity in May is

another reason to expect AUD/USD to bounce higher with the 2019 range.

Accordingly, we even see a decent risk/reward of a hawkish re-pricing of the RBA

compared to the current gloomy outlook. Current financial conditions point to a

stabilization of the 9x12 FRA 2-3 months from now. Yes, the RBA will likely cut

once or twice this year, but that is already in the price. The best risk/reward

is likely to pay the front now or else buy the AUD versus either NZD or USD."