Tag Archive: Carry Trade

Video: Interest Rate Differentials Increasing Financial Market Leverage To Unsustainable Levels

We discuss the rate differentials between Switzerland, Britain, Europe, Japan and the United States and how this Developed Financial Markets carry trade is incentivizing excessive risk taking with tremendous leverage and destabilizing the entire financial system in the process in this video.

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Attack The Fed’s War On Savers, Workers And The Unborn (Taxpayers)

The central banks have gone so far off the deep-end with financial price manipulation that it is only a matter of time before some astute politician comes after them with all barrels blasting. As a matter of fact, that appears to be exactly what Donald Trump unloaded on bubble vision this morning:

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Are Central Banks Setting Each Other Up?

Authored by Mark St.Cyr, There are times you try to connect the dots. There are others where those connections warrant adorning your trusted tin-foiled cap of choice; for you just can’t get there unless you do. This I believe is one of those time...

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BoJ Adopts Negative Interest Rates, Fails To Increase QE

Well that did not last long. After initial exuberance over The BoJ's wishy-washy decision to adopt a 3-tiered rate policy including NIRP, markets have realized that without further asset purchases (which were maintained at the current pace), there is...

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Global Risk Off: China Reenters Bear Market, Oil Tumbles Under $30; Global Stocks, US Futures Gutted

   "We're gonna need a bigger Bullard"     - overheard on a trading desk this morning. Yesterday, when looking at the market's "Bullard 2.0" moment, which was a carbon copy of the market's kneejerk surge higher response to Bullard's "QE4" comments fr...

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(1) What Determines FX Rates?

The effects of so-called “currency wars” and other central bank actions are small compared to the long-term impact made by these five catalysts, which include credit cycles, trade balance, differences in economic growth, and more.

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(6) FX Theory: Carry Trade and Reverse Carry Trade

This page discusses two closely related concepts: the carry trade and the reverse carry trade.

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(6.1) FX Theory: The relationship between Current Accounts Surpluses and the Carry Trade

The EUR/USD is going on its longest winning streak for a long time. Since May 27, it has improved from 1.2850 to 1.3396 and is approaching 1.34. What are the reasons?

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CHF Is No Safe-Haven, but a Safe Proxy for Global Economic Growth

In our view the Swiss franc is not a pure Safe-Haven, but a "Safe Proxy for Global Economic Growth". Global investors want to participate via the purchase of safe Swiss multi-nationals in global growth. This means inflows into Swiss franc denominated assets. Together with the big Swiss trade surplus, this implies a stronger franc. China stands for global economy, its slowing growth has a negative influence on the profits of Swiss multi-nationals...

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Ageing and Immigration in the U.S. and Japan and the New Normal



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CHF as Funding Currency: Where is the Carry Trade, Bob Savage?



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Because They Knew What They Were Doing: The Parallels between European and SNB Leaders

Similarly as European leaders knew what they were doing with the euro, namely introducing a not feasible currency, Swiss National Bank did between 2005 and 2008, namely the absolutely wrong thing.

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How Currency Speculators Help the SNB to Fight against Ordinary Investors

A discussion in the investor forum made clear how currency speculators currently help the SNB to maintain the floor against normal investors. A situation that was different in August/September 2011, when the SNB had to fight against these speculators.   A discussion in the investor forum Seeking Alpha: part one   Based on our analysis of …

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The Three Main Forex strategies: Trend Following, Mean Reversion and the Carry trade. Is the Carry Trade Dead ?

  Submitted by Mark Chandler, from marctomarkets.com   Net Speculative Positions, FX Outlook, Global Stock Markets, Week October 15    Market participants have to confront a stark asymmetry.  There are many ways to lose money, but there appears to be only three ways to make money. Nearly all strategies seem to come down to some variant …

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Net Speculative Positions, FX Outlook, Global Stock Markets, Week of October 1

  Submitted by Mark Chandler, from marctomarkets.com   If the third quarter was about the reduction of tail-risk by official actions, then Q4 will be about the limitations of the policy response. It will pose a challenging investment climate after what turned out to be a favorable performance in Q3. Equities generally did well. The US …

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Why is the Swiss safe-haven so completely different from the Yen ?

4 future scenarios for the Swiss franc and the Japanese yen For many people it is astonishing that the Swiss franc continuously rises against the euro, especially when markets are up. Is the CHF no safe-haven any more ? This year the Japanese yen has strongly fallen against the major currencies. Together with the upturn …

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Written in February 2012: Will the EUR/CHF never rise over 1.22 or 1.23 again?

Our analysis from February 2012 shows astonishing accurateness: It predicted that the euro would not rise against CHF and that the commodity currencies were overvalued and subject to correction. Basic foreign exchange theory, the SNB price stability mandate and strong fundamentals for Switzerland and bad ones for the peripheral countries of the euro zone speak for the thesis that the EUR/CHF exchange rate might never go over the level of around...

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The new European Save-Havens: Trade SEK/CHF and NOK/CHF

After the announcement of the floor in the EUR/CHF pair, many predicted the Swedish and the Norwegian Krone to take the place of the Swiss Franc as European save-haven against the Euro turmoil (http://on.ft.com/pKSJ1V). Both countries possess a low level of debt, positive trade balance and very competitive economies.

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