Emerging Market FX: The Straw That Broke The Carry-Trade's Back …

FX markets featured significant volatility in the past week, though the driver of that volatility was a combination of several idiosyncratic factors, rather than a core underlying narrative. Widespread risk aversion and position unwinds dominated market trading with China PMI, weak US earnings, and BoJ un-dovishness cited among more systemic factors. Turkey and Argentina (among others) have more idiosyncratic risks (and limits approaching) but as Barclays notes, market positioning has played a major role in the moves as market volatility appears to have been the straw that broke the carry-trade’s back – for now… as EM currency returns have notably decoupled from moves in US rates.Barclays on carry-US rates dislocationFX markets featured significant volatility in the past week, though the driver of that volatility …

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FX markets featured significant volatility in the past week, though the driver of that volatility was a combination of several idiosyncratic factors, rather than a core underlying narrative. Widespread risk aversion and position …

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Emerging Market FX: The Straw That Broke The Carry-Trade's Back …

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