Carry Trade Givith, Carry Trade Taketh Away - AUDJPY Collapses
As we have been pointing to the cracks, the yen is rising to the surface
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C
Equities continue to fall, and given the market dynamics we're not surprised. Tech is the biggest laggard, down 2.5% today and nearly 7% since last week's top.
In “Vol Control Funds Have Room to Drop Risk Exposures,” I went over why vol control funds can still degross from risk assets and Monday's pullback could be a dead cat bounce.
What is troubling for bulls is that the undergoing sell off has yet to trigger CTA levels to which they begin to heavily sell off risk exposures.
Behind the paywall, I'll get into previous notes on the yield curve, potential bottoming yen and others from May and June and where we are now. It's almost too perfect.