At Any Rate Global FX: Wary of complacency in FX
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Apr 2, 2026 Jainik Mody, CFA, an EM equities and cross-asset strategist at J.P. Morgan, joins to unpack macro and FX complacency. They discuss geopolitical and cyclical risks to FX, energy-driven terms-of-trade effects, vulnerable European and EM currencies, and positioning for EM equities with a barbell between energy, quality growth, and defensive yield stocks.
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Complacency In FX Amid Geopolitical Noise
- FX markets look complacent about cyclical risks despite recent geopolitical headlines and quarter-end flows.
- James Nelligan warns retaliation and supply shortages (oil, helium, sulfur) could create meaningful cyclical impacts and FX terms-of-trade shifts.
Oil Spike Would Hit Energy Importer Currencies
- Rising oil to $120–$130 would mechanically hurt energy-importer currencies versus the dollar via terms-of-trade effects.
- James Nelligan highlights Euro, Sterling, Swiss, and Kiwi as vulnerable energy importers with dollar strength as a likely outcome.
Use Beta Neutral Pairs To Express Terms Of Trade
- Use beta-neutral or relative trades to express terms-of-trade risks rather than outright directional exposures.
- James Nelligan suggests pairs like AUD versus GBP and NOK baskets to capture nuanced relative moves.