Today’s Trading Playbook
KEY THEMES
Yesterday, a Reuters report said that foreigners could be starting to be a bit cautious on Egypt's lucrative carry trade. The reason behind this is the downward spiral that the Turkish lira (TRY) went on, which accelerated in December. Furthermore, the static nature of the EGP FX rate at the tough times of COVID-19 and what followed has served the carry trade in Egyptian treasuries well so far, yet post the TRY incident, some argue that it could be a little spooky to investors. Time is a crucial factor. More flexibility in FX rates could upgrade in priority from being “encouraged” to a “must” if the drama in TRY effect persisted to synchronize with other global liquidity disrupters such as the Fed’s announced moves in 2022, alongside the overall global divergence in monetary policy stances.
Now, on to the top news and analysis for the day.