Emerging Market Rout Extends to the Gulf Region

The video discusses the current state of the carry trade, focusing on the impact of rising US bond yields and the Trump factor on emerging markets. It highlights the selling of emerging market bonds and the resulting currency impacts. Despite these challenges, there are positive trends in emerging markets, such as narrowing current account deficits and strong growth rates. The video suggests that once the Trump factor stabilizes, there may be a return to the carry trade.

What is the current state of the Bloomberg EMF X carry trade?

• It is thriving due to high yield premiums.

• It is booming because of increased demand for emerging market bonds.

• It is declining due to rising US bond yields.

• It is unaffected by global economic changes.

What is the effect of US bond yield increases on emerging market bonds?

• It makes emerging market bonds more attractive.

• It has no effect on emerging market bonds.

• It stabilizes the value of emerging market bonds.

• It reduces the allure of emerging market bonds.

How does the Trump factor influence the carry trade?

• It strengthens the carry trade by boosting emerging market currencies.

• It has no impact on the carry trade.

• It stabilizes the carry trade by reducing interest rates.

• It causes uncertainty and affects interest rate expectations.

What is one positive trend in emerging markets mentioned in the video?

• Rising volatility in the FX market.

• Increasing current account deficits.

• Decreasing growth rates compared to developed markets.

• Narrowing current account deficits.

What is the current state of volatility in the FX market according to the video?

• Volatility is unpredictable and fluctuating wildly.

• Volatility is irrelevant to the carry trade.

• Volatility is lower than in recent months and years.

• Volatility is at its highest in recent years.