This will sound like heresy to my colleagues Down Under, but I have a tickle that the next macro move will favor the pound and disadvantage the Oz. As regular readers know, I am extremely skeptical that China can lead the global economy out of recession though that is the fashionable view at the moment. I am also hopeful that the banking sector has seen the worst, and a way to play that view is to buy the pound, which is essentially a leveraged play on the financial service sector given the importance that industry to the UK economy.
The market has prices in a China-led rebound into the AUD and financial Armageddon into the pound. With bank earnings starting to show signs of life (Wells Fargo and Goldman Sachs) and Asia still in the dumps (Singapore GDP down 20%!) . Goldman is raising private Capital today while HSBC was able to do the same a bit over a week ago. Both are positives signs.
A small punt, buying GBP and selling AUD looks like a good play to me.
