FX carry trades - earning the yield spread available between two typically risky and safe currencies - is a long-standing theme in markets, which has also enjoyed excellent risk-adjusted returns over the last year. But with rate markets becoming more disruptive, are these strategies at risk? This week, we look at the positioning and pricing in currencies exposed to carry trades, on both the long and short side, to determine if any complacency persists. Host Tim Graf, Head of Macro Strategy for EMEA, puts his volatility hat on to talk through these risks.<br>See omnystudio.com/listener for privacy information.

There's Something About Carry

Street Signals

[SPEAKER_A] This is Street Signals, a weekly conversation about markets and macro brought to you by State Street Markets. I'm your host, Tim Graf, Head of Macro Strategy for Europe. Each week, we talk about the latest insights from our award-winning research, as well as the current thinking from our strategists, traders, business leaders, clients, and other experts from financial markets. If you listen to us and like what you're hearing, please subscribe, leave us a good review, get in touch. It all helps us to improve what we offer. With that, here's what's on our minds this week. </p> I can't remember a week where as early as Tuesday morning I was already starting to look ahead to what was happening the following week because it was so dull and what was left of this week also looked pretty quiet. Side note to my boss, that does not mean I have not been working. These episodes take forever to put together, but it does mean I was kind of scraping around for things to talk about this week. Thankfully, I was reading some research from the BIS on Tuesday, and I think I did come up with something worth talking about. The last few weeks we've done a few episodes that covered the direct and indirect impacts that recent sharp movements in interest rate markets might or might not be having across other markets. We've focused on the Japanese yen, the AI trade, broader market volatility, and how suppressed it all looks. These are all big market topics this year, especially in the last few weeks.

There's Something About Carry

Read the full transcript

The candid version is on a podcast,
not the earnings call.

There's Something About Carry

Read the full transcript

The candid version is on a podcast, not the earnings call.

The candid version is on a podcast,
not the earnings call.