September 2019 was a volatile month for US money markets as a confluence of events caused sudden shortages of excess reserves in the financial system. The Federal Reserve stepped in to shore up liquidity, but not before secured overnight funding rates spiked to over five percent. In this blog post we describe how stress in …read more
About Andrew Bloomfield, CFA
Andrew Bloomfield is an Associate Director in the Research Team at Record. Andy holds a BSc in Economics from the University of Surrey and before joining Record worked on the Economic Research desk at J.P. Morgan. Andy is also a CFA Charterholder.firstname.lastname@example.org
Entries by Andrew Bloomfield, CFA
The increased nervousness among market participants over the past week is palpable. The prospect of an expanding trade war is back on the table, the US yield curve is perilously close to a much-feared inversion, invoking calls for Fed easing later this year, and the European Commission just released its pessimistic excessive deficit review of …read more
The concept of stability in the Chinese currency has been of great interest to investors, especially since the introduction of the People’s Bank of China’s (PBoC) preferred measure of CNY strength, the ‘CFETS index’. As it stands, the official stance of Chinese policymakers is to manage the bilateral exchange rate versus USD such that CNY …read more
This is an executive summary of our white paper on EM Currency Risk Management. Please contact us for a copy. Emerging market (EM) currency exposure is generally expected to deliver positive returns on account of faster productivity gains and higher real interest rates relative to developed markets. However, EM currencies are more volatile than their …read more
2018 was a tough year for the EUR/USD exchange rate. After a false start in January, the euro fell from its high of 1.25 versus the dollar to 1.14 by year end. The pair had to contend with a number of pressures including an up-rating of the market’s expectations around US monetary policy, US-centric trade …read more
The Venezuelan government recently announced a de facto 95% devaluation of the bolivar and in the process pegged it to the value of the government’s newly issued crypto-come-oil-currency This will be an interesting development to follow. Not least because it is the first time a government or central bank has pegged to a cryptocurrency (the …read more
• Some market participants are worried about the ever rising market value of US borrowing vis-à-vis the rest of the world – as measured by the Net International Investment Position
• Currency depreciation can function as an effective method of adjustment following an increase in external borrowing
• However, there are reasons to be cautious about this line of thinking, especially with respect to the US dollar. These include asset valuation effects, and the role of the US as a global facilitator of excess saving.
In light of the currency board arrangement which pegs the HKD to the USD at a level of 7.80, the Hong Kong dollar’s decline this year represents a sizeable exchange rate move.
In this blog post we investigate the causes and discuss the implications for the Hong Kong Monetary Authority’s currency arrangement.
This year the RMB has bucked its recent trend and remained broadly stable against the US dollar for the first half of 2017. As the US dollar retraces, the RMB has softened against its main trade partners.
For Policymakers, this is a convenient outcome, though there exists a delicate balance to maintain and the recent change to the PBoC’s fixing mechanism looks to be a reflection of this.
If the self-imposed constraints of the ECB’s quantitative easing programme are respected, we estimate that the ECB will run out of eligible German Bunds (and German state and agency debt) to buy by mid to late 2018. We see this as the perfect excuse the ECB has for an early tapering of QE, as the Eurozone recovery consolidates.