Carry Trade DetectionTRINITY EXCLUSIVE
Trinity proprietary composite scored 0-100 capturing carry trade regimes via USDJPY + USDX + commodities basket pressure proxies.
Trinity exclusive model
This metric is a proprietary Trinity Insights model. Its formula, inputs, weights and parameters are NOT disclosed. The page documents only the output (bounded scale, interpretation zones, historical context). Access to the score and its time series is via the REST API and the MCP server, subject to the required tier.
What is it?
Carry Trade Detection is a Trinity proprietary composite scored 0-100 that captures the intensity and direction of currency carry trade activity. Carry trades borrow in low-yielding currencies (historically the Japanese yen) and invest in higher-yielding currencies (typically the U.S. dollar) and assets. When carry trades unwind abruptly, they trigger forced selling of high-yielding assets, including risk-on equities and crypto. The composite aggregates three components: USDJPY (the primary carry pair), USDX (the carry destination strength), and a commodities basket inverse z-score (capturing risk-off rotation that indicates carry unwind).
How to read
Values above 70 indicate strong carry trade activity - yen weakness + dollar strength + commodities weakness simultaneously. Values below 30 indicate carry trade unwinding - yen strengthening + dollar weakening + commodities strengthening, often coinciding with equity volatility spikes. The 50-line is the 90-day rolling neutral. Rapid declines from above 70 to below 30 within days are historically associated with major risk-off events (August 2024 yen carry trade unwind being a textbook example).
Key zones
• Above 80: Extreme carry trade buildup - historical late-cycle warning, watch for unwind triggers • 70-80: Active carry trade regime - sustained yen weakness fueling risk asset rallies • 50-70: Mild carry pressure • 30-50: Mild unwind tendencies • Below 30: Active carry trade unwinding - risk-off rotation, equity vol spikes likely • Below 20: Extreme unwind - historical cross-asset stress events (BoJ shock, geopolitical events)
What to observe
• Sustained values above 70 with rising USDJPY: classic carry trade buildup phase, fuels equity and crypto rallies • Sharp drop from > 70 to < 30 within 7 days: carry unwind event in progress, watch for VIX spike confirmation • Slow drift from 60 to 40: gradual carry erosion, less violent than abrupt unwinds but durable headwind • USDJPY stable but commodities surging: rotation into hard assets, often precedes formal unwind • BoJ policy shift events alongside elevated readings: immediate unwind catalyst, historically violent
Historical context
Major carry trade unwinds visible on this composite include the August 2024 yen carry unwind (BoJ rate hike + Nikkei -12% single day), the September 2022 multi-asset stress (BoE pension fund crisis + UK gilt blowup), the March 2020 COVID flash crash (universal risk-off), and the late-2018 risk-off (Fed hiking cycle). Each event showed the composite plunge from elevated readings into restrictive territory within days. Calm carry regimes (composite stable around 50-60) coincided with the 2017 broad bull market and the 2023-2024 disinflation pivot recovery.
Expert notes
⚠️ Trinity Exclusive Model - composite formulation original to Trinity Insights. Operates in the Macro Intelligence scope (currency flow tradfi reading), and is distinct from the Smart Money Flow reading exposed in the Price Intelligence rubric. Both are complementary and can be cross-referenced for full cycle context.
Common mistakes to avoid
• 'High composite = automatic risk-off coming' - High readings indicate buildup, not imminent unwind. Buildups can persist for years before triggering events. • 'Yen alone tells the carry trade story' - USDJPY is the dominant pair, but USDX and commodities provide critical confirmation. Single-component reads miss regime context. • 'Carry unwinds are always violent' - Most unwinds are gradual (composite drifting 60 → 40 over months). Violent unwinds (composite > 70 → < 30 in days) are tail events.
Programmatic access
REST API
curl -sS \
'https://api.trinityinsights.io/api/v1/macro-intelligence/macro-v2-carry-trade-detection/history?days=90' \
-H 'X-API-Key: $TRINITY_API_KEY'MCP server
{
"tool": "get_chart_value",
"metric_id": "macro-v2-carry-trade-detection",
"timeframe": "1y"
}Required tier: performance. See the pricing grid for the tier list and the MCP documentation for multi-client configuration.
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Institutional disclaimer
Trinity Insights is an educational and analytical tool. The metric above does not constitute investment advice. Trinity Insights is not a Crypto-Asset Service Provider (CASP) registered under MiCA Regulation (EU) 2023/1114. See the full disclaimer.