Carry Trade DetectionTRINITY EXCLUSIVE
Trinity proprietary composite scored 0-100 that summarises currency carry trade conditions. Its construction is not disclosed.
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 and invest in higher-yielding currencies and assets; when they unwind abruptly, they trigger forced selling of risk assets, including equities and crypto. The composite summarises currency and cross-asset conditions. Its construction and its inputs are proprietary and not disclosed.
How to read
Values above 70 indicate a strong carry trade regime. Values below 30 indicate carry trade unwinding, often coinciding with equity volatility spikes. The 50-line is the composite's 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). The composite is refreshed weekly; the publication estimate shown on the chart adds the source lag to that weekly cadence.
Key zones
• Above 80: extreme carry buildup - historical late-cycle warning, watch for unwind triggers • 70-80: active carry regime - sustained risk asset rallies • 50-70: mild carry pressure • 30-50: mild unwind tendencies • Below 30: active carry 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: classic carry buildup phase, which has fuelled 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 • 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. • 'One currency pair tells the carry trade story' - A single indicator misses the regime context; the composite aggregates several public inputs without disclosing them. • '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/metrics/macro-v2-carry-trade-detection/data?timeframe=90d' \
-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.