Market resilience persists despite recent geopolitical flare-ups in the Middle East, with the current bullish carry and U.S. dollar barbell strategy remaining robust due to diversified energy exposure. While tech sector volatility triggers concerns regarding compute demand and regulation, the structural shortage of memory chips supports the broader AI cycle through 2028. Japan’s potential deployment of the Government Pension Investment Fund (GPIF) to stabilize JGB yields and the yen introduces a significant, unconventional policy tool that complicates bearish yen strategies. Meanwhile, sterling benefits from subsiding political risk, positioning it for potential gains against the euro. Conversely, the Norwegian krone remains tethered to core inflation data and oil price dynamics, requiring a selective approach to currency positioning as markets navigate these shifting cyclical and policy-driven landscapes.
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