BofA Dig Into Regional Flows

Bank of America write “last year, the USD/EMFX buying was a strong, common theme until 3Q across regions. This year lacks a theme as strong as this one. BofA investors in all regions have sold EUR and CHF, but that's as far as cross-regional agreements go.”

• “USD and LatAm FX have been supported primarily by Asia-based investors, but Americas investors have been skeptical. JPY has been favoured by Americas and EMEA investors but sold by Asia ones. Last year, EMEA investors sold GBP strongly; this year, bought it back.”
• “Regional disagreements are broad-based. For instance, Americas investors have supported EM FX in all regions this year (less so LatAm), EMEA investors have mostly sold, while Asia investors have bought LatAm and sold EMEA EM.”
• “Consistent with the above, the recent USD rally was driven by EMEA and Asia investors.”