Founder

Olivier Desbarres

Exacting. Excellent. Exceeding. Exemplary.

4X Global Research

4X Global Research was founded in 2017 to provide institutional and corporate clients with the substantive research, high-quality analysis and thoughtful insight on Emerging and G20 economies and financial markets they need to make informed and timely decisions and gain an edge in their investments.

FX & Rates

<p><strong>The Federal Reserve has in the past six weeks diligently stuck to its “patience until substantial further progress is seen” monetary policy mantra. Its “reward” has been range-bound US Treasury yields, a slowly depreciating Dollar and a metronomic rise in US equity indices, with all three financial markets exhibiting only modest volatility.</strong></p><p><strong>Since 19<sup>th</sup> April the Dollar NEER has depreciated a further 0.6% to within striking distance of a 14-week low, in line with “<em>our core scenario that the Dollar will indeed lose further ground</em>”. We remain bearish the US Dollar, a theme we will explore in greater detail in forthcoming <em>FIRMS</em> reports.</strong></p><p><strong>Fed Chairperson Powell would argue that keeping US Treasury yields in check has been a worthy achievement given the backdrop of President Biden’s ambitious fiscal stimulus plans and accelerating US economic growth and rising domestic and global inflation. </strong></p><p><strong>A GDP-weighted measure of headline CPI-inflation in 32 major economies rose to 2.1% yoy in March from 1.4% yoy in February, the largest monthly increase since December 2009. But core CPI-inflation in developed economies rose only marginally in Q1 2021, with the rate of inflation in March of 1.2% yoy below its 10-year average of 1.5% yoy.</strong></p><p><strong>While backward looking these data they may explain in part why developed central banks, with the exception of Bank of Canada, have so far felt justified in keeping their policy rates on hold and the modalities of their asset-purchase programs broadly unchanged. </strong></p><p><strong>In the past month currencies in Emerging Europe, Africa and Latin America have been main beneficiaries of still reasonably low US yields, weakening Dollar, burgeoning global growth and robust risk appetite. The timing of this EM rebound has coincided with our forecasts.</strong></p><p><strong>Non-Japan Asian currencies have lagged, which we attribute in part to portfolio outflows and NJA central banks keeping a close eye on a flat-lining Chinese Renminbi.</strong></p><p><strong>This differentiated EM currency rally will extend near-term, in our view, but high-yielding EM currencies in particular remain vulnerable to any spikes in US and other developed market government bond yields and more generally market volatility. </strong></p>

The Federal Reserve has in the past six weeks diligently stuck to its “patience until substantial further progress is seen” monetary policy mantra. Its “reward” has been range-bound US Treasury yields, a slowly depreciating Dollar and a metronomic rise in US equity indices, with all three financial markets exhibiting only modest volatility.Since 19th April the Dollar NEER has depreciated a further 0.6% to within striking distance of a 14-week low, in line with “our core scenario that the Dollar will indeed lose further ground”. We remain bearish the US Dollar, a theme we will explore in greater detail in forthcoming FIRMS reports.Fed Chairperson Powell would argue that keeping US Treasury yields in check has been a worthy achievement given the backdrop of President Biden’s ambitious fiscal stimulus plans and accelerating US economic growth and rising domestic and global inflation. A GDP-weighted measure of headline CPI-inflation in 32 major economies rose to 2.1% yoy in March from 1.4% yoy in February, the largest monthly increase since December 2009. But core CPI-inflation in developed economies rose only marginally in Q1 2021, with the rate of inflation in March of 1.2% yoy below its 10-year average of 1.5% yoy.While backward looking these data they may explain in part why developed central banks, with the exception of Bank of Canada, have so far felt justified in keeping their policy rates on hold and the modalities of their asset-purchase programs broadly unchanged. In the past month currencies in Emerging Europe, Africa and Latin America have been main beneficiaries of still reasonably low US yields, weakening Dollar, burgeoning global growth and robust risk appetite. The timing of this EM rebound has coincided with our forecasts.Non-Japan Asian currencies have lagged, which we attribute in part to portfolio outflows and NJA central banks keeping a close eye on a flat-lining Chinese Renminbi.This differentiated EM currency rally will extend near-term, in our view, but high-yielding EM currencies in particular remain vulnerable to any spikes in US and other developed market government bond yields and more generally market volatility. 

Fixed Income and Currency Strategist

Gautam Jain, PhD, CFA

<p>In this note, we compare the performance of Latin American and Asian currencies as the former had started outperforming earlier this month but the latter has since caught up. The performance gap between the two remains at its widest in 10 years.</p><p>Separately, the attached file is a snapshot of EM currency market, which we produce daily, and where we seek to identify the leaders and laggards among currencies by comparing the performance of each to its history as well as to other currencies based on their respective betas to the broad market.</p>

In this note, we compare the performance of Latin American and Asian currencies as the former had started outperforming earlier this month but the latter has since caught up. The performance gap between the two remains at its widest in 10 years.Separately, the attached file is a snapshot of EM currency market, which we produce daily, and where we seek to identify the leaders and laggards among currencies by comparing the performance of each to its history as well as to other currencies based on their respective betas to the broad market.

FX Dashboard: LatAm FX Outperformance Versus Asia Did Not Last

<p>In this note, we look at the strong negative correlation between EM currencies and the dollar, and its implication for trading opportunities within EM.</p><p>Separately, the attached file is a snapshot of EM currency market, which we produce daily, and where we seek to identify the leaders and laggards among currencies by comparing the performance of each to its history as well as to other currencies based on their respective betas to the broad market.</p>

In this note, we look at the strong negative correlation between EM currencies and the dollar, and its implication for trading opportunities within EM.Separately, the attached file is a snapshot of EM currency market, which we produce daily, and where we seek to identify the leaders and laggards among currencies by comparing the performance of each to its history as well as to other currencies based on their respective betas to the broad market.

FX Dashboard: EM Currencies on Aggregate Have Mirrored the Dollar This Year

Smartkarma Research Team, Smartkarma

Smartkarma Research

Smartkarma Research Team

Smartkarma

Smartkarma unites the fragmented investment industry, connecting institutional investors, independent research providers, and corporates within a single network.

Research Reinvented

<p>For our next webinar, we're excited to host Insight Provider <a href="https://www.smartkarma.com/profiles/gautam-jain-phd-cfa" target="_blank" data-smartkarma-citation="accounts:16876" rel="noopener">Gautam Jain, PhD, CFA</a> , who will be going over the process with which he comes up with trade ideas in Emerging Markets FX and Rates. </p><div><h3>The webinar will be hosted on Wednesday, 28 April 2021, 11:00 SGT/HKT.</h3></div><div>
<div class="content-highlight"><h2><a href="https://share.hsforms.com/1H9pFZOB-RF2J00kbvMmxcw2c5gj?zoom_webinar_id=87206774217" target="_blank" rel="noopener">Register for the Webinar here</a></h2></div>
<div id="ember2586"><div><div>Gautam Jain has over 20 years of experience covering global emerging fixed income markets, both as a strategist and a portfolio manager. He has worked in buy-side and sell-side firms, including The Rohatyn Group (TRG Management), Barclays Capital, and Millennium Partners. He has helped manage emerging markets local-currency and hard-currency debt funds. The assets that he covers include currencies, interest rates, sovereign credits, and related derivatives. He specialises in portfolio construction, smart-beta index creation, and asset allocation. He holds a Ph.D. in Operations Research from Columbia University and is a CFA charter holder.</div></div></div>
<div id="ember2587"><div><div><div></div></div></div></div>
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For our next webinar, we're excited to host Insight Provider Gautam Jain, PhD, CFA , who will be going over the process with which he comes up with trade ideas in Emerging Markets FX and Rates. The webinar will be hosted on Wednesday, 28 April 2021, 11:00 SGT/HKT.
Register for the Webinar here
Gautam Jain has over 20 years of experience covering global emerging fixed income markets, both as a strategist and a portfolio manager. He has worked in buy-side and sell-side firms, including The Rohatyn Group (TRG Management), Barclays Capital, and Millennium Partners. He has helped manage emerging markets local-currency and hard-currency debt funds. The assets that he covers include currencies, interest rates, sovereign credits, and related derivatives. He specialises in portfolio construction, smart-beta index creation, and asset allocation. He holds a Ph.D. in Operations Research from Columbia University and is a CFA charter holder.



Smartkarma Webinar | Alpha Bites: Trade Ideas in FX and Rates

<p>In this note, we highlight the outperformers and underperformers among EM currencies as US long-end yields have come off from their peak at the end of last month.</p><p>Separately, the attached file is a snapshot of EM currency market, which we produce daily, and where we seek to identify the leaders and laggards among currencies by comparing the performance of each to its history as well as to other currencies based on their respective betas to the broad market.</p>

In this note, we highlight the outperformers and underperformers among EM currencies as US long-end yields have come off from their peak at the end of last month.Separately, the attached file is a snapshot of EM currency market, which we produce daily, and where we seek to identify the leaders and laggards among currencies by comparing the performance of each to its history as well as to other currencies based on their respective betas to the broad market.

FX Dashboard: Leaders and Laggards in EM FX as US Yields Retreat from the Peak

Indonesia

The Indonesian rupiah is the official currency of the Republic of Indonesia. 

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Something Has Got to Give

Treasury yields have been range-bound despite global backdrop of stronger growth and rising inflation. USD weaker, equities and (most) EM...

Olivier Desbarres

FX Dashboard: LatAm FX Outperformance Versus Asia Did Not Last

We compare the performance of Latin American and Asian currencies as the latter has caught up to the former. However, the performance gap between...

Gautam Jain, PhD, CFA

FX Dashboard: EM Currencies on Aggregate Have Mirrored the Dollar This Year

In this note, we look at the strong negative correlation between EM currencies and the dollar, and its implication for trading opportunities within...

Gautam Jain, PhD, CFA

Smartkarma Webinar | Alpha Bites: Trade Ideas in FX and Rates

On 28 April, 11am SGT, join our webinar with Insight Provider Gautam Jain, who will be going over the process with which he comes up with trade...

Smartkarma Research

FX Dashboard: Leaders and Laggards in EM FX as US Yields Retreat from the Peak

In this note, we highlight the outperformers and underperformers among EM currencies as US long-end yields have come off from their peak at the end...

Gautam Jain, PhD, CFA

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