FX and EM Weekly Thoughts

Barclays research notes that EM carry trades have underperformed amid Fed hawkishness and advises profit-taking. Growth momentum in commodity-exporting and tech-manufacturing economies is highlighted as a better alternative driver.

Key Takeaways

• 1.Carry trades in EM FX have underwhelmed; the report suggests taking profits on long carry baskets (BRL, MXN, COP, INR, ZAR) due to Fed hawkishness.
• 2.Growth momentum in specific sectors like AI-capex beneficiaries (metals, semiconductors) is identified as a more robust driver for relative currency performance.

Table of Contents

• Big Picture
• SIGNATURE
• Major data/events/speakers
• In focus
• USD
• EUR
• JPY
• GBP
• Commodity FX
• Scandies and CHF
• Non-Japan Asia
• LatAm
• EEMEA
• Data calendar