Signal over Noise: The IMF meeting’s wall of worry

Signal over Noise with Ulrike Hoffmann-Burchardi

Themes at the IMF/WB Spring Meetings

Signal over Noise: Tipping point for Middle East conflict

Global FX: Cease-fire, the dollar, DM/EM FX impact, IMF round-up

The desk is cautiously optimistic about the dollar's trajectory in light of recent geopolitical developments and shifting inflation dynamics. Per the full note from J.P. Morgan, the announcement of a ceasefire has led to a renewed focus on carry trades, particularly favoring high-yielding currencies like the Australian dollar and Brazilian real. This comes as inflation forecasts have been upgraded across 70% of countries monitored, suggesting a more persistent inflation regime that complicates central bank policies. As the dollar remains a high-yielding currency, the desk suggests a more selective approach to bearish dollar positions, emphasizing carry efficiency in trade implementations.