Barclays
FX Outlook 2026: Navigating the Turn
LIVE28 November 2025USD bearish
FX Macro Quant
Barclays quantitative strategy signals and factor analysis
Key Insights for 2026
1GBP outperformance is supported by both fundamental and quantitative signals -- fiscal clarity, carry, and momentum all align.
2EM carry strategies work best when funded by JPY or CHF rather than USD, given our moderate USD bearish thesis.
3Commodity momentum (ToT) favors AUD and NOK as green transition metals demand provides structural support.
4EUR range dynamics mean pure EUR/USD carry strategies have limited edge; prefer cross-rate expressions.
5Selectivity in USD shorts is key -- broad USD short baskets underperform targeted positions in GBP, NOK, AUD.
6Election risk creates vol opportunities: sell rich HUF vol, accumulate cheap BRL and USD vol ahead of events.
Strategy Returns: Strong vs Weak Equity
Avg quarterly returns by equity quartile regime
Strategy Regime Sensitivity
Weak equity return vs strong equity return per strategy
Strategy Returns Heatmap
Color intensity represents return magnitude
| Strategy | Weak Q1 | Q2 | Q3 | Strong Q4 |
|---|---|---|---|---|
| G10 Carry: adjusted by volatility | +2.5% | -0.6% | +2.0% | +2.8% |
| Global Carry: adjusted by volatility | -3.5% | +0.0% | +0.8% | +2.3% |
| EM Carry: adjusted by volatility | +0.0% | -0.1% | -0.7% | +1.8% |
| Global Real Carry (core) | -2.9% | +0.9% | +1.3% | +1.6% |
| G10 Commodity ToT | -2.6% | +1.4% | +2.4% | +1.2% |
| G10 Equity momentum | -4.2% | -0.4% | +0.5% | +1.0% |
| Sterling outperformance basket | +3.5% | +1.0% | +1.2% | +0.9% |
| Global carry + growth + value | +3.1% | +1.1% | +1.4% | +0.7% |
| Selective USD short basket | +3.2% | +0.8% | +1.0% | +0.5% |
| Global Commodity ToT | +1.3% | +1.6% | +0.8% | +0.4% |
| G10 Rates momentum | +1.8% | +1.4% | -0.5% | +0.0% |
| G10 Value REER PPI | -0.6% | +0.2% | -0.3% | -0.1% |
| Global Value REER PPI | +3.3% | +0.5% | +0.2% | -1.1% |
| G10 Growth (RV FRIs) | +4.1% | +0.3% | +0.6% | -1.2% |
| G10 Composite Growth (EAS+FRI RV) | +4.9% | +0.3% | +0.1% | -1.9% |
Strategy Profile
Absolute return magnitude
Live Market Context
EUR/USD
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GBP/USD
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USD/JPY
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USD/CHF
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AUD/USD
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USD/CAD
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