This Is Not The Time For Jpy Funded Em Carry

This report outlines a bearish outlook for JPY-funded EM carry trades and identifies structural inflationary pressures from AI-related capex. It also highlights a strategic shift in Chinese household savings toward domestic equities.

Key Takeaways

• 1.AI-related supply chain pressures are actively contributing to US inflation.
• 2.JPY-funded Emerging Market carry trades are considered risky due to extreme positioning and BoJ hawkishness.
• 3.Chinese household savings are rotating from property/cash into domestic equities, supported by policy.

Table of Contents

• Summary – Key Points
• Macro Drivers
• The Great China Savings Rotation
• Consensus GDP forecasts
• Consensus CPI forecasts
• Multi Asset
• Fixed Income
• Currencies
• Equities
• Alternatives
• Performance of major commodity indices

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