In the movie Being There Chauncey Gardner predicted “there will be growth in the spring”. Ephemeral cherry blossoms are a welcome harbinger of spring. Unfortunately, April showers of poor economic data are going to continue for months to come, though substantial economic support from financial authorities does provide a tailwind to economies and financial markets. …read more
Oil prices crashed, COVID-19 is causing a shock across economies, and to strain matters further, many banks are stepping away from market making activities in order to use their risk capital where it’s most needed: the corporate sector. As you will have noticed, FX volatility is up! As Europe became the epicentre of COVID-19, European …read more
On 6th April, the Czech National Bank (CNB) announced an end to their currency floor
The market reaction was muted by comparison to that in the response to the collapse of the EURCHF floor in 2015
We analyse the differences in economic fundamentals and central bank policy which allowed this much smoother exit from a currency floor.
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.