Episode 36: The Carry Trade Unveiled: Impacts on Global Markets
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In this episode of the Bryan Foltice Behavioral Finance podcast, Bryan discusses the recent market volatility linked to the carry trade, a complex financial strategy involving borrowing in low-interest currencies like the Japanese yen to invest in higher-yielding assets.
Using current market data, he provides an in-depth explanation of how fluctuations in currency values impact these trades and their broader implications on equity and bond markets. The episode aims to educate listeners on the recent disturbances caused by potential interest rate hikes in Japan and how this phenomenon affects global financial markets.
00:00 Introduction to the Podcast and Market Volatility
00:59 Understanding the Carry Trade
02:13 Example of the Carry Trade with Japanese Yen
03:46 Impact of Currency Rates on the Carry Trade
08:23 Recent Market Reactions and Risks
11:33 Conclusion and Final Thoughts
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