SocGen Warns: “If It Walks And Talks Like A Bubble, It Probably Is”

SocGen Warns: “If It Walks And Talks Like A Bubble, It Probably Is”

Time and again, we've warned that EM resiliency in the face of myriad headwinds (or at least "things that should be headwinds") is likely unsustainable. The durability of EM flows is almost entirely attributable to the market's faith in central banks. Vol will remain suppressed and DM policy normalization will proceed at a snail's pace. If those two assumptions are borne out, then the carry trade will continue to be not just viable, but in fact a no-brainer. EM FX vol is in a downtrend and a
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