carry trade玩完了

deleveraging.....出來混 總有一天要還的

• Carry trade funding currencies - such as Yen, Swiss franc, US dollar - are appreciating on a trade-weighted basis. High yield currencies facing selloffs as carry trades unwind on deleveraging
• BNP: Carry will end in 2008. Why? 1) Pressure for Asian currency appreciation will blow Bretton Woods II into pieces. 2) Banks' balance sheet de-leveraging due to frozen money markets. Non-US banks hold a $10trn USD-denominated funding position - the globe's biggest carry trade. Reduction of USD-denominated liabilities by non-US banks will create USD demand. EM FX volatility will surpass that of G10
• Goldman Sachs: Differentiation remains key theme in EM FX. Those with behind-the-curve central banks will underperform. CE-4 countries outperform as monetary and fiscal policy has generally been quite conservative
• Danske: FX markets have rewarded hawkish central banks and penalized countries with large funding needs. The most highly leveraged economies (e.g. Iceland, Turkey, South Africa, Hungary) get hit most severely, but even Asian currencies are failing to appreciate on inflation due to risk of growth slowdown
  
• Goldman Sachs (not online): NOK, VEB, CAD, MXN and RUB are positively affected by higher oil prices. INR, CNY, KRW, TWD and THB are negatively affected by higher oil prices
• MS: EM currencies should broadly outperform most G10 currencies but still depreciate due to commodity slowdown, trade reliance on US and, for some, c/a deficits. Slowing EMs in danger of sharp depreciation b/c investors expect rapid economic growth from EMs