Goldman have named their top three long-short trades for the year ahead (many of you have likely read this already). The first sings a familiar song: Go long US equities and short Australian dollar. Given our forecasts for both assets, with an S&P year-end target of 1900, and a year-end AUD target v the USD of 0.85, we see scope for both legs of the trade to generate potential returns, the analysts said. GS say the second best long-short trade is long five-year Eonia/short five-year US Treasuries and number three is long US dollar/short Canadian dollar. There you have it... might be of interest to a few.
Very interesting post Tom - interesting two of their short trades involve betting against commodity currencies - hard to see logic in that unless you aren't bullish global growth (which i'm not personally but not sure that's the GS 'house' view), and would also make the 1900 target for the S&P strange, unless they have a no/minimal Fed tapering stance.