Economics is fundamentally flawed – far worse than the Bank of England realises

Jan 11, 2017 15:30 pm UTC| Insights & Views Economy

The Bank of Englands chief economist, Andy Haldane, recently criticised his very own profession. This led to a bout of soul searching for economists as we face, again, the familiar criticism that nobody predicted the 2008...

FxWirePro: Monetising USD/JPY at between 118 and 125 in six months while mitigating short gamma risk with leveraging effect

Jan 11, 2017 12:17 pm UTC| Research & Analysis Insights & Views

As we do not expect the USDJPY to exceed 126 (multiyear double top since 2002), we prefer for a call spread ratio 1x1.5 instead of vanilla structures, such that the topside breakeven is at this level. Shorting volatility...

FxWirePro: Should you blame BoJ for USD/JPY vol and risk reversal shift?

Jan 11, 2017 11:48 am UTC| Central Banks Research & Analysis Insights & Views

Although the Yen appears under pressure momentarily as BoJ caps nominal yields and risk sentiment holds up, but the move in relative real yields between Japan and the US represents a clear case for a weaker yen. The risk...

Rapid rise in PPI may complicate PBoC's monetary policy management

Jan 11, 2017 11:06 am UTC| Insights & Views Economy Central Banks

China Statistics Bureau report on January 10th showed Chinas headline CPI inflation came in at 2.1 percent y/y in December, missing market expectations of 2.3 percent and below 2.3 percent recorded in November. On a...

FxWirePro: Kiwi dollar appears weakest among G10 currency against USD but how much weak? Shorting vega volatility through American RKO answers

Jan 11, 2017 09:47 am UTC| Research & Analysis Insights & Views

Fading Chinese growth and commodity prices remain a major risk for commodity currencies. More specifically, China remains the second destination for NZ exports, just after Australia and before the US. Any slowdown in...

FX Hedging Strategy Series

FxWirePro: What after FED hikes and hints of hawkish tones - Treasury yields, ETF liquidation, and Gold trade perspectives

Jan 11, 2017 06:04 am UTC| Insights & Views Central Banks

This write up emphasizes the upholding longs in Feb17 CME gold futures following the December Fed hike, macro markets broadly reacted meaningfully to the more hawkish rate projection, with gold specifically selling off to...

Four key times presidential nominees failed to gain Senate confirmation

Jan 10, 2017 15:55 pm UTC| Insights & Views Politics

Republicans are rushing to begin confirmation hearings for Cabinet appointments even before the FBI has finished its background checks. For President-elect Donald Trumps opponents, this makes uncovering flaws in his...