We enter short EUR/AUD at spot ref. 1.4598, with a soft target of 1.30 and hard stop-loss of 1.5300.
Alternatively, we see value in other commodity exporters as well, and see short EUR/CAD as an option.
As the decline in Russian energy supply will likely be permanent, the negative ToT shock should also be structural in nature. The corresponding shift benefits alternative suppliers of natural gas and LNG in the global market.
While we broadly expect tightening global financial conditions to weigh on commodity exporters and cyclical currencies vs. the USD, we recommend to go short EUR/AUD as a relative play amid the worsening energy crisis.
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