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3 days ago · As such, a further grind lower in FX volatility, and resumption in the carry trade, could both be on the cards. One of the main themes that has been emerging this year is that of policy divergence. The idea that, while the broad direction of travel for monetary policy across the G10 should remain the same – i.e., towards a looser stance ...
1 day ago · Carry Trade Dynamics: With FX volatility subdued, the analysis identifies attractive carry opportunities, recommending the USD and GBP as investment currencies and the CHF and JPY as funding currencies. Commodity-linked currencies such as NZD, AUD, and CAD are also seen as favorable due to improving commodity terms of trade.
4 days ago · A low vol FX world, though, is one where carry is likely to come back into sharp focus. Given that carry trades – funding a high-yielding long, with a low-yielding currency – aim to primarily profit from the yield differential, such a strategy tends to benefit in times of lower volatility, primarily due to the reduced risk of an adverse market move eliminating any carry earned, encouraging ...
I recently learned about carry trade and its ups and downs. A eli5 post did a good job explaining why you couldn't just borrow from Japan (low interest rate) and deposit in Argentina (high interest rate). But I noticed different countries in the EU also have varying interest rates. Eg. France LT interest rate is 2.82% while Italy's is 3.7%.
4 days ago · A high cost of carry might indicate that the market anticipates a price decline, while a negative cost of carry might suggest expectations of a price increase. Conclusion. The cost of carry is a fundamental concept for investors, especially those dealing with derivatives and futures trading. By understanding the factors influencing the cost of ...
2 days ago · When the futures curve is upward sloping (futures prices are higher than spot), which is typical for gold, it is said to be in contango, which generally reflects the cost of carry. COMEX (operated by CME Group) is a key market centre for gold futures trading.
