Deutsche Bank
FX Blueprint 2026: The Great Rotation
FX Volatility
Deutsche Bank volatility outlook, carry-to-vol analysis, and event risk
Carry-to-Vol Ratios
Higher ratio = more attractive carry trade. Color = quality score
Quality Distribution
Carry trade quality scores
Carry Pairs: Live Rate Tracking
Current live rates for DB carry-to-vol pairs
FXO Themes for 2026
JPY vol is dramatically underpriced
JPY implied volatility does not reflect the asymmetric risk of carry unwind. Buy USD/JPY puts, sell USD/JPY upside. The vol surface is mispricing the most asymmetric trade in FX.
Express Great Rotation via options
EUR/USD risk reversals should trade with significant call premium. Buy 6m EUR/USD call spreads and EUR/USD-USD/JPY dual digitals to leverage the rotation theme.
Scandi vol cheap to fundamentals
NOK and SEK implied volatility is near historical lows despite the magnitude of expected moves from European fiscal expansion. Buy EUR/NOK and EUR/SEK downside.
EM vol differentiation
EM vol is low but differentiation is key. HUF election vol is rich (sell), while ZAR vol is cheap relative to the magnitude of expected appreciation (buy).
USD correlation regime shifting
USD correlation structure is changing as the Great Rotation breaks the 'strong dollar = everything else weak' paradigm. Sell USD correlations across G10.
Cross-asset vol linkages
FX vol disconnected from equity vol. Expect FX vol to reprice higher as the rotation theme creates directional moves that current pricing does not capture.
Event Volatility Profile
Current vs historical average
Election & Event Risk
Hungary Parliamentary Elections
Significantly overpriced. Sell EUR/HUF topside one-touches for premium.
Brazil General Elections
Fair pricing. Accumulate BRL vol in Q2/Q3 for event risk.
US Midterm Elections
Begin building USD vol positions in Q3.