US On Monday 1st October, the auction of three- and six-months treasury bills took place. The former have been issued with an average yield of 2.175% against 2.18% of the previous sitting while six-months have been issued averagely at 2.335% compared to 2.32%. Wednesday the EIA published data about WTI Read more…
In this article we are going to analyse Brazil’s next General elections, scheduled to be held on October 7 (i.e. today). The first section will present some basic information about Brazil and a brief background on the current political situation. The second part will present key factors on the Brazilian Read more…
UK Brexit talks continued and the Prime Minister Theresa May has been under increasing pressure during the week, amid Conservatives Annual Conference where her speech will be under scrutiny. Mr Johnson, the former foreign secretary, affirmed itself against the Chequers plan for Britain’s relations with the UK after it leaves Read more…
This article analyses the economic landscape in Poland. It presents the figures that led FTSE Russell to review the outlook on this no-longer-emerging market. When discussing The FTSE Quality of Market criteria, the author focuses on parameters improvement, which resulted in the upgraded outlook of the Polish economy. The Read more…
Greek Banking Sector The Greek banking system is built around four large systemic banks, whose summary statistics you can see in the table below. All four banks have undergone a significant restructuring process, whereby both the asset value and the market capitalization went down a lot. In addition, a number Read more…
Reserve Currencies A reserve currency is defined as a currency held by government for international payment purposes. The most important usages are: Repay back international debt (generally issued in reserve currencies) Defend the domestic currency against depreciation Improve the government credit rating Reserve currencies are many. The IMF chooses the Read more…
Carry Trades and the Interest Parity Condition The uncovered interest rate parity (UIP) condition states that, under risk neutrality, the gain from borrowing a low interest rate currency and investing in a higher interest rate one will, in equilibrium, be matched by an equally large expected loss by a depreciation Read more…
US On Friday, the biggest revision (since 1999) in Global Industry Classification Standard took place. The new communications sector now include AT&T, Verizon, Century Link, Comcast, 21st Century Fox, Netflix, Walt Disney and, recent entrants, Alphabet and Facebook. Consequently, the Telecom sector which represented 2% of the S&P 500, will Read more…
US Over the course of this week several key US data were released. On Tuesday, the Institute for Supply Management’s Manufacturing PMI was released: it fell to 57.3 from the previous month’s 59.3 and missing market expectations of 58.3. On Wednesday, the Federal Open Market Committee (FOMC) left its target Read more…
Introduction In this paper, we will try to explain what are the Euro Interbank Offered Rate (Euribor) and Euro OverNight Index Average (Eonia) rates, what drives the spread between them and specifically why this was the case during the 2008 financial crisis. Euro Interbank Offered Rate (Euribor) rates are the Read more…
Correlation of 10y US Treasuries with Stock Market On April 25th, the yield on the 10-year US Treasury note broke above the psychologically important 3% threshold for the first time since 2014. The yield’s high for the day was 3.033%, meaning it was just short of 3.05%, which would have Read more…
US This week, US equities have shown an increase in volatility: on Tuesday 24th, following the breakthrough of the psychological barrier of 3% in the yield of 10y US treasuries, the most important US indexes S&P 500/DOW JONES 30 and Nasdaq 100 have lost about 2% each. On the same Read more…
Introduction Trade wars and tit-for-tat tariff threats between the two largest national economies should not be expected in a world embracing trade integration and common regulation through institutions such as the World Trade Organisation (WTO). However, this is exactly what we are currently observing in a US-led, politically motivated upheaval Read more…
The CDS Market Until 2008, credit default swap (CDS) markets have grown exponentially since their emergence in the late 1990s but shrunk considerably to an estimated outstanding notional value of $9.6 trillion in 2017. Despite deliberate efforts by the International Swaps and Derivatives Association (ISDA) and market participants on both Read more…
Introduction Information has always been one of the main sources of alpha on the market. Centuries ago just having first-hand information about the outcome of a war could very well constitute an important edge over others, the famous speculation of Nathan Rothschild on the Battle of Waterloo comes to mind. Read more…