Over the last few days and weeks, as the odds of a vote to leave in the referendum have moved from a remote possibility to somewhat less so, market participants have spent more and more time wondering about how they are positioned going into the vote, relative to their benchmark, their peer group, or their risk budget. The significant moves that we have seen in recent trading sessions show pret…Read the article
Russian corporate bonds were one of the best performing asset classes last year, with a total return for the JPM CEMBI Russia index of +26%, despite Russia’s GDP dropping by -3.7% on the back of a hugely challenging economic backdrop and geopolitical headwinds. I recently spent a week in the cold of Moscow’s early spring, meeting banks and corporates to help me assess whether the economic sanct…Read the article
Much has been discussed on the topic of the optimal level of foreign exchange reserves. One of the common methodologies is the IMF’s ARA (Assessing Reserve Adequacy) metric, which essentially provides a range based on a country’s trade, broad monetary aggregates and external liabilities. How much weight should be given to each factor varies according to the economic structure of each country, i…Read the article
We recently blogged about the marked effect the collapse in commodity prices, particularly oil and energy, have had on global inflation rates across the world. Headline inflation rates in major western economies have been in, or have flirted with, deflation throughout the year in spite of ongoing economic growth and a steady recovery in labour markets.
An interesting issue is whether this, seem…Read the article
During my recent trip to Latin America it was funny (but not surprising) to hear the locals worrying about Colombia becoming the next Brazil. In turn, Brazilians are worried about becoming Argentina (though I believe the Argentinean problems are much more solvable in the near term than Brazil’s) …Read the article
M&G and bondvigilantes.com proudly present the scariest charts on the global economy. Some will make you laugh, some will make you cry. You will be amazed, you will be enchanted, you will be mystified, you will be amused. Of course, the following is not for the faint of heart. You have been warned.
- Companies are scared of risk
There has been a glut of corporate bond issuance since the financ…Read the article
Part of the ABC of Latin American debt series
Brazil currently finds itself caught in a destructive trap between politics and economics.
On the political front, it is impossible to trade the daily noise and headline risk. The possible impeachment (45% probability as a guesstimate) of Rouseff would still be subject to various steps and legal challenges and could take a minimum of 6-9 months. Thr…Read the article
Recently Claudia and I were in Lima for the annual meetings of the IMF and World Bank. Unsurprisingly (given the host nation and history of the meetings) the majority of sessions were on the developing world, in particular Latin America. Claudia will shortly be posting a series of more detailed blogs on the LATAM countries she visited, so I’ll focus more globally.
In aggregate, the IMF is predi…Read the article
Whilst economic forecasters are currently concerned about falling oil prices and the implications for global growth, weather forecasters worry about the impact an El Niño weather event could have on global weather patterns. In August, America’s National Oceanic and Atmospheric Administration (NOAA) said there is a 90% chance that the current Niño event will continue through the remainder of the…Read the article
I have heard it said, semi-seriously, that the biggest risk for the Eurozone isn’t that Greece leaves the single currency and its economy collapses, but that it leaves and thrives. In this scenario Greece starts again, debt free, able to adapt fiscal easing rather than austerity, and with a devalued “new drachma” encouraging an influx of tourists and a manufacturing and agricultural export boo…Read the article