* G10: Next week’s FOMC meeting should catalyze a breakout for G10 FX. We think this will be in favour of the dollar, given improving short term rate differentials and better data. In EM, INR, TRY and ZAR remain highly vulnerable to US policy normalization, BRL and IDR should be better supported.
* G10 Options: Buy a 2 month 0.91 AUD/USD put with a EUR/AUD cross knock out at 1.50 on lower vol and elevated implied cross correlation.
* Asia: With Korean authorities reportedly pondering measures to stem capital inflows, KRW will be thrust back into the limelight. We do not think authorities will walk down this path, and remain bullish KRW.
* LatAm: We summarize our views and trade recommendations, staying short BRL on the back of structural weakness, long CLP/COP with further upside potential offered by relative monetary policy re-pricing and long MXN against BRL and CZK.
Read the full report: Market Research
Deutsche Bank