U.S. Stocks vs. Bonds: Are Diverging Valuations Signaling a Shift? 
China's Refining Industry Faces Major Shakeup Amid Challenges 
Energy Sector Outlook 2025: AI's Role and Market Dynamics 
Wall Street Analysts Weigh in on Latest NFP Data 
UBS Predicts Potential Fed Rate Cut Amid Strong US Economic Data 
U.S. Treasury Yields Expected to Decline Amid Cooling Economic Pressures 
Indonesia Surprises Markets with Interest Rate Cut Amid Currency Pressure 
The headwinds we highlighted last week for EM FX remain; negative EM political news flow is high, US tax reform discussions continue to provide upside USD risk, and EM FX positioning remains crowded even though outflows are picking up. As such, we add to our bearish stance and move underweight TRY, leaving us underweight in EMEA EM FX overall.
We encourage UW in the JPM’s GBI-EM Model Portfolio with an UW in ZAR and TRY vs. OW in RUB, and OW in PLN and CZK hedged against UW in RON. We also buy a 2m 4.10 USDTRY call option in outright trades.
Outright trades:
08-Jan-18 USDTRY call (4.10), spot reference: 3.8856
Short ZAR vs basket (0.5 EUR, 0.5 USD)
Short EURCZK spot reference: 25.55
Long ILS vs. basket (0.5 EUR, 0.5 USD) spot reference: 4.1460 (EURILS), 3.5101 (USDILS)
01-Mar-18 EURHUF downside seagull (Long put spread (304, 297), short call (312)), spot reference: 311.720.
