The Bank of England (BoE) is widely expected to raise rates in the UK at today’s monetary policy committee, potentially marking the first time the base rate has been above 0.5% since 2009. Could this be the start of a transition to a rising rate environment similar to that seen… Read the article
Real interest rates are an anchor for the valuation of all assets. The classical theory of interest holds that as a ‘discount rate,’ they embed the market’s relative preference for cash today over cash in the future.
The US cash rate is arguably the best sense we… Read the article
Each year at Jackson Hole policy makers and economists around the world meet to discuss the issues of the day. Attention on policy makers has intensified to extremes since the financial crisis and it is unsurprisingly Janet Yellen and Mario Draghi who grabbed the headlines from the… Read the article
Last month apparently represented the twentieth anniversary of the start of the Asian crisis, and five years since Draghi’s ‘whatever it takes’ speech. This week apparently marks the ten-year anniversary of the financial crisis.
These events make great ‘hooks’ for content in the press, blogs,… Read the article
From the Financial Times this month:
“The tranquillity of Wall Street’s ‘Fear Gauge’ continues to baffle investors, given the market uncertainty”
Financial commentators and journalists – who are just as prone to herding as investors themselves – have brought attention to the ‘volatility paradox,’ the apparent disconnect between… Read the article
Markets have recently experienced some heightened volatility, which at times has been explained by commentators as being due to the changing expectations around the outcome of the UK referendum. Last week, equity markets globally experienced losses, while ‘safe haven’ assets, such as G7 government bond markets, rallied. The biggest currency… Read the article
A Bloomberg headline yesterday provided the breaking news that the “ECB Bolsters Economic Recovery”. The article covers the latest European Purchasing Managers’ Index (PMI) numbers from Markit Economics, which indicate expansion in much of the Eurozone.
We believe the longer-term trend in European PMIs is a reasonable indicator… Read the article
The victory of left-wing anti-austerity party, Syriza, in Sunday’s Greek election has reignited concerns about the potential for Greece to default on its debts, and the country’s future in the euro. While Syriza leader Alexis Tsipras has expressed the intention to renegotiate the terms of Greece’s bailout, he has been… Read the article
In recent weeks, a number of factors – Greek politics, French, German and Chinese PMIs, the continued decline in the oil price – have come together to rattle investor confidence and trigger some dramatic changes of direction across global financial markets, in extremely short-term phases.
Turbulence in Russian currency markets… Read the article
Thursday’s headlines fretted over initial sharp declines across equity markets (see chart) on the back of Mario Draghi’s latest policy announcement, which apparently disappointed investors hoping for the imminent launch of full-blown quantitative easing by the ECB.
As a side note, most of the concern manifested in European markets themselves… Read the article