TREE NEWS reports: Citigroup told clients investors can re-engage in carry trades now that the U.S. midterm elections are “in the rearview mirror,” citing a risk-on market environment and expectations for continued volatility decline. Strategists led by Dirk Willer recommended buying a carry basket long Turkish lira, Indian rupee, Colombian peso and Brazilian real, while shorting the Chinese yuan, Singapore dollar, Israeli shekel and Thai baht as funding legs. Lower volatility into year-end should favor carry trades, they wrote in a report.
Citi Re-enters EM Carry Trades as Midterms Fade From View
AI take
Citi's call is a bet that the volatility regime, not the underlying macro, is the binding constraint on carry. The funding-leg construction is the telling part: shorting the yuan and Singapore dollar alongside the shekel and baht implies a view that low-yield, low-volatility proxies stay subdued, which is where the trade breaks if risk appetite turns. The open question is whether the expected decline in volatility actually materializes into year-end; carry baskets built on that assumption tend to unwind quickly when it does not.
Generated by AI for reference only.
Share on WeChat
Open WeChat → Scan → then tap "…" to send to a chat or Moments.
Tap "…" in the top-right corner to send to a chat or share to Moments.
Related News
8m ago
Chinese Public Fund Managers Bought Own Funds 2,143 Times in Q3 2026
12m ago
Democrats Sweep US Midterms; Dow Jumps 3% as Data Center and Chip Stocks Slump
24m ago
China’s Highest-Altitude Ultra-Supercritical Coal Power Project Enters Commercial Operation
27m ago
China e-commerce logistics index rises to 112.1 in October
36m ago
Chinese Listed Firms Warn High-End LFP Cathode Supply to Stay Tight Through 2027
37m ago
Goldman: Democratic wins could temporarily halt US data center approvals