Doha talks add to AUD & CAD downside vulnerability - BNPP

Research Team at BNP Paribas, suggests that the commodity strategists note that the Doha meeting produced the most bearish outcome for oil prices amongst the various scenarios the market was looking at: no deal, no future calendar and a fight for market share that is still very much at the heart of producer policy.

Key Quotes

“Given the current oversupply problem and BNP Paribas remains bearish on crude from current levels The oil market has opened lower this morning and should continue to trade lower over the next few days. Other linked commodity prices such as iron ore are also lower this morning.

We suspect it may be a challenging start of the week for CAD and AUD. BNP Paribas FX Positioning highlights that AUD (+19) and CAD (+5) are now the second and third largest long positions among G10 FX. AUD especially looks vulnerable.

On Tuesday, RBA minutes may shed more light on the adjustment to the easing bias at the last policy meeting. We remain short AUDNZD targeting 1.06 noting far less vulnerability on positioning from NZD.”