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30 Mar 2015
Tactical trades in FX as geopolitical risks rise for oil – RBS
FXStreet (Barcelona) - Brian Mangwiro, Strategist at RBS, suggests trade ideas into a potential oil squeeze risk over the next 1-month as the recent development in the Arabian peninsula risks disrupting oil supply.
Key Quotes
“Medium term strategic view: We are bearish crude oil premised on the supply glut, rising inventories, storage constraints and lacklustre global demand.”
“In addition, successful conclusion of Iran nuclear negotiations could bring significant new oil supply to the global market.”
“Short term view (positive for oil prices): Risks are mostly political. Yemen is the latest and potentially most important flashpoint. Any escalation of tensions in Yemen could raise supply shock risks for oil.”
“Trade Ideas: We suggest the following tactical trades (1-month type horizon):
Long NOK/SEK targeting 1.12 (current 1.076).
Long CAD/MYR targeting 3.05 (current 2.94). Within the oil complex, MYR outperformed CAD, NOK and COP as oil prices fell. There is potential for MYR to underperform in a retracement.
Long USD/TRY. Higher oil prices would hurt Turkey. The lira is already underperforming on politicisation of monetary policy and rising political risks ahead of the June parliamentary elections.”
Key Quotes
“Medium term strategic view: We are bearish crude oil premised on the supply glut, rising inventories, storage constraints and lacklustre global demand.”
“In addition, successful conclusion of Iran nuclear negotiations could bring significant new oil supply to the global market.”
“Short term view (positive for oil prices): Risks are mostly political. Yemen is the latest and potentially most important flashpoint. Any escalation of tensions in Yemen could raise supply shock risks for oil.”
“Trade Ideas: We suggest the following tactical trades (1-month type horizon):
Long NOK/SEK targeting 1.12 (current 1.076).
Long CAD/MYR targeting 3.05 (current 2.94). Within the oil complex, MYR outperformed CAD, NOK and COP as oil prices fell. There is potential for MYR to underperform in a retracement.
Long USD/TRY. Higher oil prices would hurt Turkey. The lira is already underperforming on politicisation of monetary policy and rising political risks ahead of the June parliamentary elections.”