carry trade

The carry trade appears to have been squeezed out of the system by about late November, when the yen and the Vix halted their joint ascent.

This carry trade, as it is called, has cheapened Japan's currency, much to the chagrin of American carmakers and European policymakers.

So far, however, there has been no sign of such a shift; indeed, higher Treasury yields may only encourage the carry trade.

And this omits the contribution to global liquidity of the Bank of Japan, whose low interest rates are fuelling the "carry trade" .

Now markets have reached a stage, in the biggest economies at least, where the carry trade looks hard to pull off.

What worries me from the current industry perspective was that the end investor was probably overweight in the carry trade.

Had Fannie and Freddie been hedge funds, this strategy would have been known as a "carry trade" .

There is a similar situation in the global financial market. For instance, carry trade which had discussed a lot a few years ago.

"The global carry trade is dead and in Asia, flat forward curves in the currency markets offer poor risk-reward, " she said.

The kiwi is one of the favorite carry trade investments, and higher rates in NZ would certainly help propel the currency higher.

That practice, known as the 'carry trade, ' contributes to dollar weakness but helps offshore investments.

The yen has been pushed down in recent months by the highly profitable "carry trade" .

So experience suggests that the carry trade, as applied to government bonds, is not a particularly appealing strategy.

The authors first examine returns to a simple carry trade for a set of ten rich-country currencies between 1986 and 2008.

Since the summer, foreigners have unwound the yen carry trade with a vengeance, driving the yen up.

If the carry trade is now part of a bygone era, so is the weakness of the yen.

The result has been a colossal and also lucrative carry trade, with both welcome and unwanted consequences.

This so-called carry trade is believed by many market players to be the main driver of the US unit's multi-month decline.

The yen carry trade has not been the only cheap source of liquidity in recent years.

The yen has long been a favoured funding currency for the carry trade because of Japan's permanently low interest rates.

Such investors were taking advantage of the "carry trade" , borrowing at low rates to invest in higher-yielding but riskier assets.

The banks then pocketed the difference between the two rates in a classic 'carry trade'.

where its own cheap money policy has created a flood of liquidity outside its borders, through the carry trade.

However, this carry trade-inspired liquidity is not wholly responsible for the fund flows driving equity markets.

The Fed is essentially issuing debt, and banks are engaging in what amounts to a dollar-based Fed vs. interbank carry trade.

It is another version of the "carry trade" , in which investors borrow in low-yielding currencies and buy higher-yielding ones.

The euro already faces a sea of troubles, but it could confront one more: It is becoming a favorite funding currency of the 'carry trade. '

Estimates of the total size of the carry trade range as high as $1 trillion.

Nobody warned them what happens when the Japanese carry trade goes into brutal reverse, as it does when the cycle turns.

That, in turn, would erode profits on the oil-carry trade, leading speculators to liquidate inventories, likely hammering prices.

Either way, the trend is towards a narrowing of interest-rate differentials, making the carry trade less profitable.

They argue that ultra-low interest rates are fanning a carry trade whereby traders take advantage of different rates.

Exceptionally low global financial-market volatility in the middle of the decade helped spur the famous yen carry trade.

"The carry trade could become very fashionable again, " said Martin Wiedmann, global head of foreign exchange sales at Credit Suisse.

In the latest variation on the "carry trade" theme, both companies and retail investors are borrowing dollars and investing in renminbi.

The yen carry trade has also facilitated the buoyant expansion of investments and leverage evident everywhere today.

Again, this was a version of the carry trade: they used their cheap financing to buy higher-yielding assets.

"Carry trade" currencies, with interest rates buoyed by high commodity prices, are moving in line with such prices.

If efficient-market theory cannot kill the carry trade, why don't volatile returns, and the occasional massive loss, scare off investors?

That suggests the carry-trade (selling borrowed yen to invest elsewhere) will remain attractive, limiting the yen's rise.

That the carry trade exists at all is gleaned only indirectly.

In the developing world, faster-than-expected recoveries and rising interest rates could foment a vicious carry trade.

This has also allowed the carry trade to continue for longer than perhaps would have otherwise been the case.

Past financial-market wobbles have been associated with periods when the carry trade was unwound.

Many economists and bankers suspect that carry trade activity is a key factor behind the yen's weakness.

The carry trade is back, with the dollar sometimes taking the place of the yen.

The carry trade, analysts and policymakers complained, had driven the yen to unnaturally low levels.

Another factor that some say could cause modest yen declines is the return of the yen carry-trade.

The first is the notorious " carry trade" , in which investors sell or borrow low-yielding currencies and buy high-yielders.

It hated having to keep rates low, fearing that cheap money can cause bubbles in real estate, in capital investment and in the carry trade.

But who cared about the theory when, for a long time, the carry trade produced bumper returns?

Perhaps the overall carry trade is weakening, but not with the euro as a currency to purchase, yet.

A latter-day "carry trade" involves buying the currencies of commodity producers.

When investors get nervous, they often buy back the currency in which they borrowed to fund the carry trade.

It appears that savvy investors can indeed make sustained profits from the carry trade.

They will borrow money in low-yielding currencies to invest at higher yields elsewhere (the carry trade).

This 'carry trade' helps explain why Brazil's real has risen around 35% against the U. S. dollar since the start of last year.

Those who gambled on the "carry trade" may decide to cut their losses.

The carry trade is far from risk-free.

In the past days, as spectacular moves in global currencies reveal, the carry trade has been violently unwound.

So this should give support touncovered-interest parity and deter the carry trade.

Estimates based on the short-term net foreign lending of Japanese banks put the carry trade at only $200 billion.

Indeed a popular tactic has been the "carry trade" , borrowing low-yielding currencies to buy higher-yielding (and higher-risk) currencies.

The term "carry trade" usually refers to leveraged trades by speculative international investors, such as hedge funds.

"But in the process, (a weak dollar) also promotes the dollar carry trade and we recognize that, " Gross said.

Nobody really knows how big the carry trade is.

While the new carry trade may be less leveraged, it's a riskier bet.

But why does the carry trade work?

What is more, a powerful resurgence in the carry trade seems unlikely.

For foreign investors, these bonds are an appealing way to play the carry trade.

In Japan, the west's problems have been exacerbated by the end of the yen carry trade.

The "carry trade" , the borrowing of low-yielding currencies to buy higher- yielders , is back in full swing;

in new zealand ' s case , the carry trade has given the kiwi dollar an extra upward push