Why has the EMEA FX Scorecard turned negative?
1) Carry protection is disappearing. As we stated in New Europe Weekly published on Friday markets have aggressively been pricing rate cuts across the EMEA region recently. Hence, investors are no longer being paid any significant carry to be long in any of the EMEA currencies. 2) Technical factors are turning negative. The technical score in our Scorecard is turning negative for a number of currencies as key technical levels have been broken and are weaker than or close to key moving averages for a number of the EMEA currencies. EUR/PLN, EUR/CZK, USD/TRY and USD/ZAR have all moved higher than their 20 and 50-day moving averages and EUR/HUF is closing in on the 50-day moving average as well. EUR/CZK is moving closer to the 200 days 3) Global conditions turning less supportive. Even though our score for global economic and financial conditions remains positive for all EMEA currencies, the signs of softness in the US stock markets are reducing these scores. Furthermore, US government bon
