Monthly Archives:

May 2010

The Newspapers’ Dilemma: Finance or Football

I wrote a while back about the Spanish Bank Banesto offering a deposit account that jumped from 3% to 4% should Spain win the world cup.  In the UK, Nationwide has followed suit and is offering a 4 Year Football Bond that increases from 4.15% to 4.65% should England emerge victorious at this summer’s tournament.   The investors in this product will be hoping for the swift progress for the natio…

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Speculative thoughts – round 2

It appears that developments have moved on quite dramatically since my last blog on the market describing the political dynamics between governments and capitalist investors (insert speculators here!). There are a number of key points in the latest round of sparring that I think should be highlighted.

Firstly, European governments have taken the kind of action speculators respect and can’t igno…

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Germany implements restrictions on financial markets. Is this a policy error?

At this stage the details are very limited but it appears that the German supervisory body BaFin has banned the “naked” short selling of Eurozone sovereign bonds, their credit default swaps, and the shares of ten leading German financial institutions. The ban was effective as of midnight last night.

This move by the German authorities has had the effect of spooking already fragile markets. As w…

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Dear George…

Mervyn King introduced himself to George Osborne last night by writing him a letter, not to wish him luck in his new and frankly unenviable role, nor to advise him on just how much austerity is needed on 22nd June to keep the markets supportive of gilts, but instead to explain why he has again overseen a rate of inflation of more than 1% above the target rate of 2%. The letter states that the G…

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Unemployment likely to rise for many months to come – Central Banks firmly on hold, perhaps for over a year

With sovereign and political issues taking centre stage in markets recently, macroeconomic indicators have taken a back-seat in many market participants’ minds. But how have the advanced economies been recovering, absent these risks? Today I’d like to focus on some research on labour markets that was recently published by the International Monetary Fund (IMF) in their World Economic Outlook and…

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European sovereign debt fears – limited impact on European corporate bond markets

Strong earnings results, low inflation expectations and a view that the ECB will have to keep interest rates lower for longer to support the economic recovery has seen demand for European corporate bonds remain fairly robust.

That is not to say that European corporate bond markets have been unaffected. Those credits that have been most impacted by the sovereign debt worries have unsurprisingly …

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