The global trend towards lower interest rates, exacerbated by the COVID-19 crisis, has led to an environment of suppressed yields and asymmetric risk such that traditional investments no longer offer the most efficient avenue to express macro views. Currency markets can act as the last great equilibrator when it comes to levelling-up asset valuations, …read more
Summary: The Russian rouble has been a significant underperformer in EM FX over the course of last 10 days Our analysis suggests that some of the underperformance might be an overreaction and hence provide a good entry point for investors considering a long RUB position or investment in local currency assets given that the currency …read more
The history of time has three fundamental milestones: the inception of the universe in the Big Bang (14 billion years ago), Homo Erectus emerging as Earth’s first hominid species (1.9 million years ago), and the invention of a concept that is almost indistinguishable from civilisation itself: money (7000 years ago). For a very long time, …read more
Modern Monetary Theory (MMT) is a political reaction to the constraints and costs of private financing for public spending. It is the explicit position that fiscal policy and monetary policy should be coordinated in order to avoid these constraints and costs. History is relevant. The future is untold. Money is currency is money. I hope …read more
Co-authored with Aaron Cantrell. This article first appeared on Responsible-Investor.com The advancement of ESG data access and analysis gives investors the chance to expand the scope of their sustainability objectives and investment programs, including in new asset classes. Record Currency Management has been building the research and investment infrastructure for ESG integration in currency. The …read more
The Swedish krona had a tough start to the year having depreciated over 5% against a basket of G4 currencies. This blog post outlines the outlook for the krona with an emphasis on its valuation versus G10 currencies, macroeconomic performance, external balances and the Riksbank’s policy trajectory. Potential upside and downside risks are inspected in …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
2018 has been an eventful year, with an ongoing trade war, tightening monetary policy from the Federal Reserve, increasing pressure in the Brexit negotiations, and a new Italian government which has resurrected fears about the stability of the Eurozone Despite this, G10 FX volatility has remained remarkably subdued In this blog post, we construct an econometric model to …read more
Previous EM currency sell-offs of similar magnitudes often yielded high currency returns in subsequent years. Based on valuations, historical data from previous sell-off episodes and the economic rebalancing that is taking place; current exchange rate levels suggest attractive return expectations for long-term TRY (Turkish lira) currency investments. Elevated rates of inflation and the external debt …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
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