Morgan Stanley: Fed Rate Cuts Still on Track Despite Oil-Driven Inflation 
Citigroup Delays Fed Rate Cut Forecast Amid Strong Jobs Data and Inflation Concerns 
RBC Capital: European Medtech Firms Show Minimal Middle East and Energy Risk Exposure 
Gold Loses Shine as Crude Oil Surges: Safe-Haven Metal Retreats Toward USD 4,500 Support 
U.S. Strikes on Iran Draw War Crimes Warnings from International Law Scholars 
Goldman Sachs, ANZ Cut Oil Forecasts Amid U.S.-Iran Ceasefire Hopes 
Strait of Hormuz Disruption Sparks Global Oil Supply Fears 
In our previous post we discussed on ailing Australian economy and reiterated our bearish outlook. This view of weakness is also shared by the Reserve bank of Australia, which sought to further monetary easing path. In this context we maintain our bearish view and yet present another set of data to strengthen our argument, the terms of trade.
- Terms of trade represents the ratio of export and import prices. The ratio is falling fast in recent times. We expect further sluggish data ahead and Australia's trade advantage to reduce further.
- Australian economy is suffering the headwinds from the falling commodity prices and slowing down in China and Europe.
The ratio so far has deteriorated nearly 20% since 2012. We have seen reflection of such in AUD/USD rate. The pair is currently trading at 0.78. We remain bearish despite any short term bounce. 0.80 area is importance resistance zone.
