Download PDF Introduction What are the main differences between different European economies right now? Will the two traditionally strongest nations be able to recover from these years of weak economic performance and political uncertainties? In this article we will try to tackle these questions, as well as exploring the principal Read more…
Download PDF Japan’s Yen Carry Trade Unravels The dramatic unravelling of Japan’s yen carry trade earlier this summer has continued reverberating through global markets weeks after the initial turmoil. In late July, the Bank of Japan made a pivotal shift in monetary policy, raising the target rate for 10-year government Read more…
Download PDF Introduction In 2023, the global economy has exceeded expectations, with projected global GDP growth set to beat consensus forecasts from a year ago. Core inflation has seen a significant drop, plummeting from 6% in 2022 to 3% across economies recovering from the post-COVID price surges. Notably, the US Read more…
Download PDF Introduction In a high interest rate environment, firms have to face new challenges to their capital structure and adapt to higher financing costs. Highly leveraged firms now confront more than substantial interest expenses and difficulties in refinancing. More borrowers now turn to private credit due to its additional Read more…
Download PDF Introduction During the last months, and especially from September, long-duration bonds experienced a dramatic sell-off, which pushed yields to historically elevated levels: U.S. long-term interest rates reached the highest level since 2007, while European bonds have not been so attractive since the Euro sovereign debt crisis in 2012. Read more…
Download PDF Introduction Now-casting methods are a class of forecasting models originally used in meteorology, and that later found useful applications in economics and finance. The first paper that generalizes the use of now-casting methods in economics is Giannone, Reichlin, and Small (2008). The idea of now-casting is that high-frequency Read more…
Download PDF Introduction Swap spreads, which measure the difference between the fixed rate on a swap and the yield on a Treasury bond of the same maturity, have often been negative in recent years, particularly in the wake of the financial crisis of 2008. This phenomenon has puzzled market participants, Read more…
Download PDF Introduction Inflation made a return post pandemic and has been affecting all market participators for 18 months now. In this article, we will dive into the persistence of inflation in the UK specifically and the struggles the UK has had to face trying to cool this red-hot inflation Read more…
Download PDF Introduction Global macro strategies, which aim to profit from economic and political trends across markets and asset classes, have been a staple of the investment world for decades. In recent times, these strategies have gained in popularity as investors seek to diversify their portfolios and take advantage of Read more…
Download PDF Introduction: Fixed Income Markets Performance High inflation and rising interest rates have governed the credit markets in 2022. Year-to-date, high yield bonds are down approximately 16% and investment grade bonds are down approximately 23%. The 2022 macroeconomic environment has wiped away the strong recovery seen by the credit Read more…
Download PDF A persisting trend DISCLAIMER: The EURUSD pair is an exception to general FX notation. We comply with the quoting convention adopted in the industry: when the Dollar strengthens against the Euro, EURUSD moves lower, and vice versa. For charting purposes, however, we use the USDEUR time series. The Read more…
Download PDF Time of writing: Thursday 24, February 2022 Introduction On Thursday, Russia launched a massive attack on Ukraine, spurring talks that an armed conflict might be about to start in eastern Europe. In this article, we pitch a directional global macro trade based on the currently unfolding scenarios, after Read more…
Introduction As we noted in our final publication of 2017, the year 2017 was characterized by very low volatility and stable positive returns on the majority of stock markets. This took place even despite the start of stimulus withdrawal by major central banks which was seen in the gradual increase Read more…
Since 2001, Turkey has been subject to profound and remarkable economic and financial transformations that have led this emerging market to become the 17th largest economy in the world, with a nominal GDP of $800 billion. After the banking crisis that hit the country at the beginning of 2001, Turkey Read more…
Last week we suggested shorting three Japanese financials in light of the 10-years JGB price fall, going at the same time long Olympus Corp. and the Nikkei index, in case no more easing was announced on Tuesday night. Kuroda kept monetary policy on hold and so we entered the trade Read more…