💱🔺EMFX Carry Outperforms G10FX The Most Since 2021: Cable FX Macro
- Rosbel Durán
- Apr 20, 2023
- 1 min read
An index that tracks a carry strategy in EM currencies constructed by Bloomberg is outperforming its G10FX equivalent by the most since September 2021
The gap extended this year as the Bloomberg EM Carry Trade Index gained 2.6% in March, its best month since November, it now tracks a YTD return of 5.2%. Meanwhile, the developed market index is flat this year
Most DM central banks started tightening policy over the course of last year, we saw the Bloomberg G10FX Carry Trade Index overtake EMFX over the summer into the end of 2022. The magnitude of G10FX carry out performance recorded last year was not seen since 2002
In the broader picture, what we're looking at in 2023 can be interpreted as a move back to the historic average, where emerging market carry strategies perform relatively better than in the G10FX space
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