How Tight is the Copper Market? Implications for Chile
- Date: 05/02/2016
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- Joe Spearing
A large part of the story of emerging market currencies over the last year is the impact of commodity price movements in effecting significant transfers of wealth. An extreme case of this is Chile. The world’s largest producer of Copper Ore depends on this resource for a little over half….
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Chinese Currency Decoupling
- Date: 26/01/2016
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- Andrew Bloomfield, CFA
Does the recent weakness and volatility in the CNH spot and short-tenor forward market herald a new era of Chinese capital outflows? Markets in the new year have not only been greeted by a sell-off which reminds us that 2015 is not still quite over, but also by the….
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China: Macro Myth-Busting
- Date: 15/12/2015
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- Andrew Bloomfield, CFA
In this blog post we offer our thoughts on three strategically important questions regarding China’s macroeconomic and FX policy, for which there appears to be little consensus. A disaggregation of the decline in foreign exchange reserves and the balance of payments reveal some less sinister causes of reserve drawdowns and….
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Labour Share of GDP and the Balassa-Samuelson Effect
- Date: 11/12/2015
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- Andrew Bloomfield, CFA
The labour share of GDP appears to be an important catalyst in the workings of the Balassa-Samuelson effect. Understanding it can allow us to better infer currency valuations and the rate at which productivity growth translates into exchange rate appreciation. The Balassa Samuelson effect postulates that productivity varies more by….
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