Barclays_FX_EM_Macro_Strategy_Quarterly_Outlook_Of_underpriced_divergence_and_rising_political_risks

FICCResearchFXStrategy18June2024FX&EMMacroStrategyQuarterlyOutlookFOCUSOfunderpriceddivergenceandrisingThemistoklisFiotakispoliticalrisks+44(0)2077732002themos.fiotakis@barclays.comThedollarislikelytostrengthen.HigherlevelsofcapacityBarclays,UKutilisationimplyslowereasingvsothers.Atthesametime,politicalriskslineupsquarelyinthedollar'sfavour(alsoLefterisFarmakisfavouringGBPandCHFvsEURandCEE).SeveralEMshave+44(0)2035556549economicorfiscalreasonstoease,butthespacetomanoeuvrelefteris.farmakis@barclays.comislimited.Barclays,UKAndreaKiguel+12125268954andrea.kiguel@barclays.comBCI,USMitulKotecha+6563085439mitul.kotecha@barclays.comBarclaysBank,SingaporeMarekRaczko+44(0)2031340089marek.raczko@barclays.comBarclays,UKShinichiroKadota+81345301374shinichiro.kadota2@barclays.comBSJL,JapanFX&EMMacroStrategyQuarterlyOverviewOfunderpriceddivergenceandrisingpoliticalrisks..................3Thedirectionofourviewsisintact.Themarketisunderpricingdivergentlevelsofcapacityutilisationaspoliticalrisksmount.Equally,however,wethinkthisisthetimeforthedollartoshine–failuretodosowouldrequireustoreviewourframeworksanew.FX&EMMacroStrategyFX&EMViewsfortheYearAhead..................................29PleasefindourupdatedFXviewsandforecastsacrossG10andEMcurrencies.Thisdocumentisintendedforinstitutionalinvestorsandisnotsubjecttoalloftheindepen...