Masters of Their Own Fate: Explaining the Swiss Franc Strength, 2011-2015
- Date: 11/05/2016
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- Andrew Bloomfield, CFA
Did safe haven flows drive an ever appreciating Swiss Franc in the run up to January 2015? The data reveal that, on the contrary, a general lack of Swiss outflows and repatriation of foreign bonds bought by Swiss domestic investors, can explain much of the pressure on the Franc to….
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Market Volatility: The Brexit Premium
- Date: 27/04/2016
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- Joe Spearing
The uncertainty associated with the outcome of the referendum on Britain’s EU membership is already affecting financial markets and the wider economy. By examining the pricing of derivatives, we can identify the price the market is putting on this uncertainty, and what movements in currency are expected between now and….
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EM Growth Vs. Capital Flows
- Date: 19/04/2016
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- Andrew Bloomfield, CFA
Growth outperformance matters in EM over the long run, but capital flows drive short run returns in the asset class. We believe there are complementarities between both. The image below is taken from a recent BIS paper* which discusses currency mismatches in EM countries, and attempts to rationalize what could….
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What Next If Negative Rates Fail
- Date: 18/02/2016
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- Andrew Bloomfield, CFA
In response to almost a decade of QE and with little discernible effect, central bankers have now resorted to negative interest rates. What is the zero lower bound and are below zero rates having the desired effect? If negative interest rates fail to halt deflationary momentum, could more extreme options….
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