Carry Trades & the Shanghai Accord
The ECB and BOJ should be asking themselves was the Shanghai Accord really worth it? Post-Feb, EURO and YEN have appreciated levels which are concerning t0 their respected governments and central banks. Also, the leverage in each of these trades carried to another financial vehicle yielding higher return is immense. The unwinding of these so called carry trades has put stress on global financial markets in a time of conditional liquidity. We compare SPX in particular.
(Update) Bloomberg has picked up on the story, as their headline states: ” YEN Strength Trips UP US Stocks”