- I think this is a great macroeconomically hedged pair trade with potential for both positions to succeed in one scenario while one or the other likely prevail in the other.
- Higher US rates spill over into emerging markets because of linkages in the global financial system.
- The way I am expressing the short emerging market trade is through call options on EDZ and EUM (emerging market inverse ETFs).
- The way I am expressing the short US Treasury price position is through call options on TYO and PST (US 10Y bond price inverse ETF).
For further details see:
Short Emerging Markets And US Bonds: Hedged With Potential For Both To Profit