Good day for the stock markets today, The dow is currently up around 3%. The British FTSE is also closed well up. Investors and speculators appear to be less risk adverse at present. This reduced risk adversity seems to have spurred on the carry trades. The Japanese Yen and Swiss Franc have fallen sharply today against all the higher yielding currencies. We are seeing the return of risk appetite in the stock markets, which if continues could certainly be benefit for the carry trades and the higher yield currencies in general. However, there is still a lot of uncertainly surrounding the subprime issues so the longer term future of these markets is still very much unknown, but today was unquestionably the best day for the stock markets and the carry trades for quite a while. GBP/JPY is currently up a whopping 600 pips or approximately 2.75%.
People who are invested in mutual funds may feel a little easier after today, but as always tomorrow could be completely different.
