carry trade

Short-term and long-term interest rates in the US have overtaken those in Australia for the first time in a number of years, with the Reserve Bank of Australia predicted to be on hold for another two years. This makes funding via US…

I have been meaning to write this post for a few days. And as the information comes in from Brazil, from China, from equity markets, it seems all the more compelling that this is indeed an important period in market and economic history. I…

The share of EM-denominated Uridashi bonds has increased steadily from less than 10% in 2006 to nearly 55% in both 2012 and 2013. So far in 2014, that EM share has risen to over 60%. It is clear that the growth in EM Uridashi issuance has…

We continue to identify four main macro issues shaping the investment climate: The tapering anticipation in the US; the stabilization of the Chinese economy; a cyclical recovery in Europe; and the long awaited Japanese purchases of foreign…

Trade data for the US, Germany, Japan and China were released earlier today. While the US, Germany and China had robust export growth that caused their surpluses to swell, Japan's numbers showed weakness despite the recent drop in the value…

Bill Gross is out with his monthly commentary. Because his points are central to the discussion of policy and markets right now, I am going to write this weekly newsletter commentary outside the paywall. The major question is about how to…

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?

Something interesting is being played out. Margin traders--the famed Mrs Watanabe-- at the Tokyo Futures Exchange--have amassed a large short yen position. There are about 900k short yen contracts as of today and about 364k are short yen…

Andy Lees argues insufficient dollars are getting into the system from the US current account deficit to finance the growth in global trade, so the stock of these international dollars is falling relative to the value of world trade. He…

The Fed is stuck at permanent zero and that means the carry trade is on. If we did have another panic, those swap lines would be handy because the Fed would again become the global lender of last resort.