Carry Trades Off Their Lows

Carry trades are off their lows thanks to today’s recovery in the Dow

On an intraday basis, new lows were made, but the Japanese Yen crosses have recovered which is encouraging. However the rebound in the Dow is not strong enough offset even half of yesterday’s losses, which makes us skeptical that the rally will continue. It remains to be seen whether the January effect will happen again in 2008.