Westpac's G10 FX model "re-enters an AUD......>

FOREX: Westpac's G10 FX model "re-enters an AUD short, the widening of the AU-US

10yr spread to -75bp a key catalyst. The Liberal/National Party election win

will not have been processed by the model (all signals are based on a NY Friday

close). That said, the result is unlikely to have much of a short-term impact on

the model's appetite for AUD either way; the Australian growth signal might be

less weak than otherwise as some Labor policies considered negative for housing

are avoided and confidence gauges could enjoy a lift, further bolstering our

Australian growth signal, but the broader headwinds facing the economy are still

there. Among the majors the model retains EUR and JPY longs and holds onto a

small USD short."