Reported 5 months ago
The article discusses the rise in popularity of carry trades across global bond and FX markets as investors exploit interest rate differentials to generate income in calm markets expected due to anticipated shallower rate cuts. Strategies like selling the Swiss franc to buy US and Australian dollars, investing in riskier European government bonds, and locking in high yields with local-currency bonds from Mexico and Brazil are being recommended by various institutions. The Federal Reserve's signaling of no further rate hikes has supported this strategy, with carry trades seeing strong returns so far this year. Emerging markets are also seeing a resurgence in the carry trade strategy, with interest rate arbitrage in developing-nation currencies poised for significant gains.
Source: YAHOO