Over the weekend, a note from Nordea strategists highlighted the seasonality delta in daily cases driving EUR/AUD spot at this time of the year. Here's what Steno and his gang said:
Virus seasonality may also become a driver of EUR/AUD. The former(?) prison colony has already reacted harshly against its citizens, but with summer soon approaching in the southern hemisphere seasonality may help the authorities declare success and let its citizenry throw some shrimp on the barbie once more – at least the FULLY VACCINATED. But as we have argued above, virus risks may be ascendant in the north for similar seasonality reasons. The UK government is planning new restrictions in October, if hospital admissions stay high. What’s more, supply constraints in the form of component shortages (semiconductors, etc) may hit Europe harder than Australia or New Zealand. The 25% collapse in iron ore prices in August would also seem unlikely to be repeated.
**Nordea is short EUR/AUD with a target of 1.5770 (and a S/L of 1.6230).
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