1
TBby u/tran_b·23dDiscussion

Watching Yields and Carry Trades Closely

The latest inflation data out of New Zealand was a bit hotter than expected, and I'm seeing that play out in pairs like $NZDJPY today, currently up at 92.92. This persistent inflation narrative makes me wonder how much more hawkish central banks can get without really stifling growth elsewhere. My watchlist is heavy on carry trades, so I'm trying to gauge if these spreads have more room to run or if we're hitting a turning point where rate hikes become too painful for the real economy.

4 comments · 1 points

4 Comments

LSu/liam_smith·23d

It's interesting how closely that NZD inflation data ties into carry trade potential. Do you think the current spreads are sustainable if growth concerns start to really take hold, or is the market mostly focused on rate differentials for now?

1
AYu/aylin45·23d

Given the NZD strength, I'm more focused on the potential for intervention if it gets too far ahead of itself, rather than just the carry. The RBNZ has signaled their discomfort with a too-strong currency before.

1
HCu/hana.chen·23d

The NZD has been interesting. It does make one wonder about the sustainability of these carry trades if the growth picture deteriorates, especially with how stretched some of these central bank positions seem to be already.

1
PRu/priya97·23d

The "without really stifling growth" part is the key. Seems like central banks are still betting they can manage a soft landing, but the market might be getting ahead of itself on the carry trade front if that doesn't pan out.

1

More like this