2024-07-25 15:13:53 ET
Summary
- Stocks collapsed due to changing expectations around global monetary policies impacting currency markets and rates.
- Yen carry trade likely to unwind as Japan hints at rate hike while the US expects rate cut.
- Higher volatility and steeper yield curve indicate potential unwinding of heavily positioned trades in the market.
Stocks collapsed on Wednesday as market dynamics shifted due to changing expectations around global monetary policies, which impacted currency markets and rates. Market-based expectations for Fed rate cuts are causing the US yield curve to steepen, while expectations for a Bank of Japan ("BOJ") rate hike are causing the yen to strengthen....
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This Massive Trade Propping Up The Stock Market May Have Collapsed