Barclays Trade Of The Week: Hedge The Downside, Sell EUR/JPY

The recent bout of global risk aversion stemming from a weakening global macro outlook has raised cross-asset volatility, leaving investors searching for havens. Uncertainty regarding the prospects of global growth, not just the trajectory of China and other EMs, has led to increased cross-asset volatility (Figure 1) as conviction is low and investors seek to cut risk exposures and flee to traditional safe havens. Amid increased market turbulence, rates markets have pushed back expectations for Fed hikes and are now pricing...