April 30 Will Be A Huge Day For Global Markets
BUSINESS INSIDER: What is the most exciting trade out there right now, in your opinion?
SEAN CALLOW: Buying the Aussie dollar against the New Zealand dollar. The cyclical tide is turning once again, so trade in the 1.06-1.07 region looks very cheap against a long-term average of 1.22.
BI: Which developments in global financial markets, if any, would you flag as most concerning for risk appetite?
SC: The risk that the Fed declares "mission accomplished" on the U.S. economy too early, winding down QE when the economy is still sluggish. Emerging markets would suffer another wave of turmoil.
BI: On the other hand, what is the most encouraging sign?
SC: It is very encouraging to see the ECB being open-minded about further easing measures given slow growth and very low inflation. Draghi is proving a far better ECB president for the euro zone — and in turn the world — than Trichet.
BI: What pieces of new information (e.g. economic data releases, price action in a given market over the next few days/weeks, etc.) do you think have the biggest potential to alter your outlook?
SC: Over the next month, Australia's Q3 CPI and the RBNZ's policy meeting will be key to the AUD/NZD outlook. Also, April 30 will be a huge day, featuring the Bank of Japan semi-annual outlook meeting, U.S. Q1 GDP, and perhaps most important, euro zone CPI.
BI: What do you perceive to be the most misunderstood trend or event in or characteristic of today's markets?
SC: Aussie dollar bears who are counting on AUD to tumble on either a China growth slowdown or a collapse in Australian house prices will be waiting a long time.