Top Currency Carry Trades to Start Your Week - 4/15

TL;DR

Last week saw a risk-on sentiment, with the dollar weakening against the euro but gaining against the yen. Global bond yields and stocks experienced a bounce.

Transcript

hi i'm pat relief from the Adamas principle big wheat last week for carry trades so I've got a bunch of slides to show you today last week it was all about risk on especially on Friday and dollar got hit although the dollar index did make a bit of a comeback through the dollar yen component so let's look at the first night euro dollar we break one ... Read More

Key Insights

• 🙈 Last week saw a risk-on sentiment, as indicated by the weakening of the dollar against the euro and the positive performance of carry trades.
• 💴 The dollar yen component played a crucial role in the performance of euro yen and Aussie yen.
• 🥺 Dollar yen is currently capped at 112.25, but a break above this level could lead to further gains and a possible test of 114.
• 🤘 Global bond yields and stocks experienced a bounce, showing signs of convergence between the two markets.
• ❤️‍🩹 Chinese data midweek and PMIs at the end of the week may influence the direction of the market, suggesting caution before celebrating a summer rally.
• 🥺 Higher yields are generally healthy for growth, but excessive increases may lead to intervention from the FOMC.

Questions & Answers

Q: How did the dollar perform against the euro last week?

The dollar weakened against the euro, with the significant level of 1.1280 being broken. This suggests a favorable environment for euro bears and carry traders.

Q: What is the current situation for dollar yen?

Dollar yen experienced a boost, but it is currently capped at 112.25. If this level is broken, further gains are expected, with a possible test of 114.

Q: Which currency pairs showed notable performance?

Euro yen and Aussie yen both showed strong performance. The dollar yen component played a significant role in driving their performance.

Q: What impact did the dollar yen have on global bond yields and stocks?

The weakening yen contributed to a bounce in global bond yields and firmness in stock markets. This convergence between stocks and global bond yields is notable.

Summary & Key Takeaways

• Euro dollar broke the significant level of 1.1280, indicating potential bearishness for the dollar and positive sentiment for carry traders.

• Dollar yen was boosted by the weakening yen, but is currently capped at 112.25. A break above this level could lead to further gains and a possible test of 114.

• Euro yen and Aussie yen both showed strong performance, primarily driven by the dollar yen component.