Risks of unwinding carry trades funded by the yen and a substantial rate cut in the US are risks for US stocks, according to Morgan Stanley.
September 9, 2024, 19:16 JST (excerpt)
Strategist Wilson pointed out in the report.
There is a possibility that a rate cut of more than 25 basis points could support the yen, but it could also have a negative impact on risk assets in the United States.
If the Federal Reserve cuts rates significantly this month, there is a possibility of further unwinding the carry trade, where US stocks are funded by the yen. This is the view of Michael Wilson, a strategist at Morgan Stanley.
According to Wilson's report, a rate cut of more than 25 basis points is likely to support the yen. If this happens, Japanese forex traders may be incentivized to withdraw from US assets due to rising interest rates in Japan, potentially leading to a repeat of the pattern that caused turmoil in the global market last month.
Strategist Wilson pointed out in the report.
There is a possibility that a rate cut of more than 25 basis points could support the yen, but it could also have a negative impact on risk assets in the United States.
If the Federal Reserve cuts rates significantly this month, there is a possibility of further unwinding the carry trade, where US stocks are funded by the yen. This is the view of Michael Wilson, a strategist at Morgan Stanley.
According to Wilson's report, a rate cut of more than 25 basis points is likely to support the yen. If this happens, Japanese forex traders may be incentivized to withdraw from US assets due to rising interest rates in Japan, potentially leading to a repeat of the pattern that caused turmoil in the global market last month.
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codeOZ(家長) : There is also Renminbi carry trade.![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
So when it goes down, it's unclear where it will spread to. Black Swans keep popping up, so there's nothing but fear.![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
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