Deutsche Bank - "G10: Trendiness has collapsed and realized vol is high while currencies are moving in lockstep. Pause before adding risk.
Inflation now matters the most for G10 FX, with those currencies displaying a positive inflation impulse doing the best (JPY, CHF) and those with a negative one the worst (AUD, NZD, SEK). Currencies continue to be very negatively correlated to carry, while sovereign risk as measured by CDS spreads is highly positively correlated.
EM: As in G10, trendiness is low. High levels of volatility have moderated somewhat
Similarly to G10, EM currencies are closely tied to CDS spreads, with tightening spreads seeing positive currency performance and vice versa. Carry is also highly negatively to currencies. Currencies with current account surpluses are performing well (CNY, ILS, HUF) while those with deficits (BRL, INR and ZAR) are doing badly."