The economic effects of COVID-19 have triggered many questions regarding price dynamics in the aftermath of the pandemic Inflation is affected by many domestic and foreign factors, which often differ between countries. CPI inflation is the most common measure of inflation but is it the most accurate or useful? The COVID-19 pandemic has caused substantial …read more
A black swan. A doomsday scenario. COVID-19. They are synonymous. A global recession is now inevitable and economic damage control remains key in a global pandemic that has decimated business-as-usual. As of this morning, White House officials have emerged from negotiations confident they will reach a deal by the end of the day on a …read more
The debt-to-GDP ratio does not represent the full scope of government liabilities, potentially calling for alternative measures of a government’s default risk. Monetary policy constraints and demographic pressures are likely to call for increases in fiscal spending, further straining governments’ balance sheets The sustainability of a government’s balance sheet is likely to depend on the origin …read more
The Canadian economy has been growing at a moderate pace however household debt has reached historical highs, raising the question of its sustainability and risks to the economy There is clear consensus among market participants and Canadian investment professionals regarding the outcome of the election The 2016 US elections and Brexit vote have resulted in …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
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 importance of responsible investing has been growing rapidly, but currency’s unique role has so far gone largely unnoticed. As Record announces that it is seeding an innovative ESG currency strategy, we ask: how exactly does currency fit into the existing ESG investment landscape? We argue that ESG currency investing can be used to incentivise …read more
The Turkish lira came to the forefront of investor attention in August 2018, having at one stage depreciated more than 40% in spot terms against a basket of G4 currencies. This is the largest depreciation seen in our Record EM Currency universe since the sell-off of the Russian rouble in 2014 during the Crimea Crisis. …read more
• As NAFTA negotiations become increasingly fraught, the risk of a complete termination by US President Donald Trump is increasing
• The long-run impact of such a termination is likely to be limited, based on the MFN tariffs the US could apply
• The most likely impact would be in terms of the real economy, as the shock generated would hit consumption, spook investment and delay the Bank of Canada’s hiking cycle.
• To investigate the magnitude of this effect, we model the impact on real economic variables and interpret the impact on the Canadian dollar. Our results suggest that a 6% depreciation of the Canadian dollar against the US dollar could be justified.
The Bank of England’s chief economist Andy Haldane suggested recently that changes in labour market structure in the UK have led to a flattening of the Phillips Curve
In this blog, we discuss the plausibility of this argument applied to a global context over a longer time horizon