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.
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.email@example.com
Entries by Andrew Bloomfield, CFA
We assess the implications of the removal of the CZK to EUR peg on April 6 2017 and what this means for how central banks manage peg removals going forward.
How to rank the relative attractiveness of Emerging Market currencies? In this blog post we bring together various metrics that should help investors decide on the perennial question, whether or not to hedge Emerging Market currency risk.
Since the US presidential election on November 9th, markets generally have welcomed the more conciliatory tone from the President-elect Donald Trump. How have currency markets reacted, how might the changing economic environment affect hedging decisions, and what does this mean for currency returns?
Sterling’s deprecation since June this year has been dramatic and many commentators have welcomed this as a way to rebalance the economy via an improving trade balance. However, this may not be the first and foremost mechanism presently at work : instead, we argue that the income balance is perhaps more important and the key adjustment mechanism in a world where trade responsiveness to currency changes is less than in the past.
Do market capitalisation driven weights make sense from a currency perspective? If not, how can we go about getting closer to a more balanced and optimal currency mix as part of international asset allocation?
The US dollar is at an inflection point. Can the dollar’s cycle continue in the face of convergent economic fundamentals and central bank coordination?
Are currency markets stuck in a period of short-term mean reversion? If so, what’s driving this and what are the implications for investors?
Did safe haven flows drive an ever appreciating Swiss Franc in the run up to January 2015?
The data reveal that, on the contrary, a general lack of Swiss outflows and repatriation of foreign bonds bought by Swiss domestic investors, can explain much of the pressure on the Franc to appreciate.
Ultimately domestic investors created an insurmountable problem for the Swiss National Bank (SNB) in the run up to the removal of the peg.
Growth outperformance matters in EM over the long run, but capital flows drive short run returns in the asset class. We believe there are complementarities between both.