Clive Corcoran

'Dollar Up Stocks Down' Will Likely Change Soon

For a calm and considered investment manager which you seem to be Roger, the question of whether we go up or down 100 points in the near term may be academic. For lots of highly leveraged hedge funds (and they do still exist) the question of whether the indices go up or down by that much AND whether the carry trades that they're also in go up and down on a pro rata basis can mean the difference between big bonuses or looking for another gig.

It is the stirrings of the old shadow banking system playing with a newly invigorated carry trade - now using the dollar as well as the yen as the funding currency - that is likely to lead to a continuing strong correlation between global equity performance and the appetite for emerging market assets, Australian dollars and certain commodities.