Emerging Carry Trade Rebounds With Real, Rand Among Favorites

What we drew from this source

The claims Via News extracted from this document. We point to the source; we don't replace it.

• The EM carry trade will be buoyed by higher-for-longer real rates to combat incipient inflationary expectations. While there are winners and losers within EM from higher oil prices, the losers are better prepared than ever, while the winners, such as Brazil for example, are supported by central bank credibility amid a backdrop of high real rates.

  60% confidence

• The average of 12-month interest-rate swaps from 14 emerging-market economies has risen to 5.7% from 5% before the Iran conflict began

  60% confidence

• The carry trade index has jumped more than 3% from its March low and gained about 1.7% since the conflict began in late February

  60% confidence

• A gauge of one-month EM foreign-exchange volatility is currently 6.88%, down from as high as 9.23% in the middle of March

  60% confidence

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