15:22 6 August 2024
WiG index has fallen approximately 13% since July peak
In 2007, as now, financial markets experienced deleveraging due to the unwinding of carry trades—where cheap yen loans were used to buy global assets. Current deleveraging is driven by rising Japanese interest rates, anticipated Fed rate cuts, and market uncertainty, leading investors to sell assets and repay yen loans, thus reducing leverage. From July to October 2007, the WIG index dropped 20% but rebounded by 18%, though it didn't reach new highs.
Currently, WIG has fallen 13% from its July peak, with a potential rebound towards 86,500 points by mid-October. However, economic slowdowns in the US and Poland in 2025 may lead to further declines. Investors are shifting to bonds, with 10-year bond yields approaching 5% and bond indices showing bullish trends, favoring safer returns over the higher risk of equities.
