Possible scenario
Carry Unwind Stress
25% Chance
The BOJ move tightens the funding currency behind years of global carry trades. If investors interpret the hike as the start of a faster cycle, forced deleveraging could spill into equities, credit, crypto, and global rates over the following sessions.
Initial impacts
- Riskier companies' borrowing costs Up
- Market volatility Up
- Bitcoin Down
- 10-year Treasury yield Down
- US dollar Up
Secondary impacts
- Technology -2.1%
- Finance
Portfolio impact
S&P 500-1.7%
Each figure is the modeled move of the S&P 500 if the outcome occurs. For information only. Not investment advice.
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