Barclays recommend short EUR vs. a basket.....>

FOREX: Barclays recommend short EUR vs. a basket of TRY, ZAR and BRL (EURTRY

ref: 5.9697, EURZAR ref: 15.2605, EURBRL ref: 4.1919, basket ref: 100, target:

97.0, stop-loss: 101.5) for a reward-to-risk ratio of 2:1.

- The dovish tilt by the Fed and other major central banks has provided renewed

momentum to the rally in EM assets. In the near term, a patient Fed will likely

alleviate global borrowing rates either directly or indirectly by allowing EM

central banks room to ease monetary policy, thereby offsetting the effects of

slower global growth on domestic demand. EM FX is more sensitive to global

growth (see Emerging Markets Quarterly: Adjusting sails into headwinds), and we

see room for differentiation, with high carry favoured over low carry and

current account deficit economies with high betas to US rates over export

dependent ones. Regionally, we see this as benefiting EEMEA and Latam over Asia,

with the FX and rates in BRL, ZAR and TRY as notable likely outperformers.

- Unlike our regular TWA trade recommendations, this trade will not expire at

Friday's New York close.