Deutsche Bank identifies being short ILS/KRW as a strategic hedge against a potential unwind in the global tech cycle. The trade exploits diverging investor behavior regarding tech exposure between Israeli and Korean markets.
Key Takeaways
- 1.Shorting ILS/KRW serves as a potential hedge against a broad tech sell-off given the extreme tech-cycle sensitivity of these currencies.
- 2.The Shekel (ILS) correlation with US tech is driven by domestic institutional investors rebalancing, while the Won (KRW) correlation is driven by foreign investor outflows.
Table of Contents
- An EM FX hedge for a tech unwind
- Appendix 1
- Important Disclosures
- Analyst Certification
- Additional Information
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Authors
Oliver Harvey
Securities
ILS/KRW
Themes
Tech Sector Cycle
Regions
Asia PacificIsraelSouth Korea