Download PDF Introduction In 2022, rates traders have had to navigate a landscape of deteriorating liquidity in sovereign debt markets. Over the past few years, there have been multiple episodes of severe illiquidity in US Treasuries and related markets. Firstly, US repo rates spiked in September 2019, with intraday secured Read more…
Download PDF New Zealand as the trendsetter New Zealand saw its Inflation rate persistently over 5.5% between 1975 to 1990, with multiple years of inflation at or above 12%. However, starting from 1991, a sharp drop to around 1-2% is observable. One of the main drivers is the Reserve Bank Read more…
Download PDF Conventional economic theory suggests that Central Banks (CBs) should only intervene to influence short-term interest rates and allow the market to set long-term rates. However, in modern economic history, this belief has been put into question: most notably, the US and the Euro Area have reacted to the Read more…
Download PDF Introduction Fixed income investments allow investors to generate steady cashflows in the future, diversify equity exposure, and lower portfolio volatility. Current inflationary pressures, tighter monetary policy, and concerns about the prospect of rising interest rates are making investors question how strategic exposure to fixed income securities can help Read more…
Download PDF Introduction Structured products are complex OTC derivatives which offer a glance into some of the deeper aspects of pricing; they are hedged with vanilla products where possible, almost always leaving basis risk, the management of which is the art of making markets in SPs. These products are very Read more…
Download PDF The Lira, inflation and COVID-19: an overview of the Turkish economy Political context Turkey’s political scene was recently in the news with the departure of Finance Minister Mr. Albayrak, a powerful politician and the Turkish President’s son-in-law. The departure of Mr. Albayrak was seen as favourably by investors, Read more…
Download as PDF Introduction Over the past few years, volatility in the foreign exchange markets has entered a marked downward trend, which ultimately culminated with the signing of the US-China Phase One trade deal in January 2020. This descending movement has characterised both Developed and Emerging Markets currency pairs and Read more…
Download as PDF Introduction Real interest rates have been fluctuating around 2% for safe and liquid asset for nearly a century before they entered a downwards trend in the last thirty years. This trend is most prevalent in advanced economies where the rate on 10-year government securities has been around Read more…
An overview of inflation interpretations In the following article, we are going to examine the current framework of monetary policy – inflation targeting – with a focus on the evolution of the inflation process Post-Bretton Woods and its effects on the current regime of price stability. In the post-war era, Read more…
In mid-September, there has been a liquidity crisis in the money market of secured overnight borrowing. We have analyzed this in an article published one month ago, headed “Liquidity Squeeze: What is the Repo-Scarcity Premium?”. Since then, the Federal Reserve proceeded to inject more than 230 billion over the period Read more…
In a world of excessive liquidity, where open market operations by central banks are ineffective, unconventional and unheard-of monetary policies need sometimes to be applied. In this article we will briefly discuss of the overnight interbank lending market in Europe (and changes in how its respective index is calculated) and Read more…
Trump’s election and his plan of loose fiscal policy put upward pressure on US inflation. In order to cool down the economy on the verge of full employment, FED raised rates in December and March and has promised two other hikes in 2017. Hiking fed fund rates is not the Read more…
It is widely known that the USA and the EU are in different economic conditions: the American economy has risen from the crisis and the FED is tightening the policy, while Draghi, the president of the ECB, declared that they will keep the quantitative easing going. Unemployment in the US Read more…
This article will introduce an unconventional way to profit when interest rates rise using inverse ETFs. We will show the upsides and downsides of these tools, focusing on how they could be used in today’s American market. Inverse ETFs could be a useful tool to deal with the possible future Read more…
The past summer has been quite hot: we saw unexpected Brexit, Turkish failed coup, the presidential campaign in the US is on the peak, and EMs are bursting out of inflows. On the backdrop of all these events, one very interesting trend may have left out of the scope of Read more…