What to Think of FX Carry Trade Revival: 3-Minutes MLIV

Watch on YouTube ↗  |  April 24, 2026 at 08:01  |  3:08  |  Bloomberg Markets
Speakers
Paul Dobson — Executive Editor, Bloomberg

Summary

The video covers the divergence between rising oil prices and tech stock strength, the role of fast money in driving the rally, and the revival of the FX carry trade as a safe yield play. Speakers note that risk of a momentum reversal exists, but for now lower volatility supports carry trades in emerging markets and energy producers.

  • Oil prices continue to rise due to Middle East conflict and lack of ceasefire progress.
  • Tech stocks and North Asian equities remain strong, driven by AI repricing.
  • Fast money (CTAs, hedge funds) is chasing momentum, not long-term investors.
  • If long-term investors do not capitulate, the rally could run out of steam and cause a volatility shock.
  • Lower volatility and stable rates are reviving the FX carry trade.
  • Higher yielding emerging markets and energy producers are recommended for yield.
  • Carry trade carries risk of a sudden reversal if Middle East tensions flare up.
Trade Ideas
Paul Dobson Executive Editor, Bloomberg 2:41
Consider higher yielding EM and energy carry.
Lower volatility and stable interest rates are making the FX carry trade attractive again. Investors should look at higher yielding emerging markets and energy producers to pick up yield, as these appear safe as long as there is no new flare-up in the Middle East.
Higher Yielding Emerging Markets XLE MED
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This Bloomberg Markets video, published April 24, 2026, features Paul Dobson discussing Higher Yielding Emerging Markets, XLE. 1 trade idea extracted by AI with direction and confidence scoring.

Speakers: Paul Dobson  · Tickers: Higher Yielding Emerging Markets, XLE