Connect the Carry Trades

By Global Macro Monitor

Wow! This chart from the Economist looks like one of those elementary school exams where you draw lines to connect the best match. So, our friends, a few questions. Which rates are the result of financial repression, capital flows, and/or stellar credit risk? And what is the best carry trade, assuming you can borrow close to the sovereign? Make sure your lines are clear.

two year government bonds

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