Morning Report Tuesday 1 September 2015
Australia's suffering from the "Carry Trade" unwind
Good morning and welcome to the first day of spring!
Volatility continued overnight with August becoming the worst month for equities since May 2011. Interestingly, though, oil has now enjoyed its largest 3 day gain since Iraq invaded Kuwait. However it's the unwinding of the carry trade that's currently hurting the ASX200 in a significant manner not the usual resources sector.
" The Carry Trade is an investing strategy in which an investor borrows money in one country at a low interest rate and invests it in another country at a higher rate".
Overall, we are witnessing a perfect example of fear and greed influencing market behaviour. It is a time where fundamentals are unclear making this an excellent study of psychological behaviours.
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