Hollywood calls and doom mongers were caught on the wrong side as oil made a sharp recovery following a gap down opening on Monday resulting in multi-week range breakouts in commodity currencies and rally in risk assets. Marc Ostwald, Strategist for ADM Investor Services, while speaking to Tip TV, said that Doha was going to be a bit of a red-herring, adding further that April is usually the best month for the equity markets along with December. However, Ostwald cautioned that the rally in equities is more of a flow thing rather than backed by fundamentals.
The economic calendar for the rest of the week and next week includes ECB rate decision and Fed rate decision, but Ostwald believes markets are not worried about the same. He stresses on the fact that markets believe Fed is unlikely to move rates in April or June.
No wonder then we have gold and equities moving higher at a same time, while greenback is taking a hit.
Ostwald also talked about the RBA now being more comfortable with AUD strength now than it was before, given it is a by-product of oil price rally; a sentiment echoed by Dirtyeconomics as well.
Watch the video for further insights on:
RBA's changing rhetoric and the upside potential in AUD/USD
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