On average, EMFX has fallen to the U.S. dollar since the Iran conflict started. However, we have seen relative strength playing out as not all currencies share the same commodity/oil dependency status. Playing a long BRL / short TRY is a classic EMFX relative value cross trade. The strategy bets that BRL will outperform TRY, driven by Brazil’s oil exporter stance versus Turkey’s vulnerability as a major energy importer with high inflation and structural pressures. Since the Iran conflict,...

Real policy rates — calculated as the latest nominal policy rate minus headline CPI — remain one of the strongest fundamental drivers of G10 currency performance in 2026. The chart below includes data up to April 2, 2026. I continue to see statistical relevance in the Q3 sample. This is beacuse higher (or less negative) real rates tend to attract capital inflows, support carry, and reinforce currency strength, especially during periods of geopolitical stress like the current Iran conflict and...

The momentum strategy profits from trend persistence and has historically delivered strong risk-adjusted returns in trending, risk-on environments while struggling in choppy or sudden regime shifts. Year-to-date, the factor has posted modest positive returns, estimated in the +3.5% to +6% range net of transaction costs (based on typical bank-published momentum baskets and cross-sectional implementations). Early-year strength came from the continuation of 2025’s USD weakness trend (DXY down...