Currencies

Emerging Markets and the Negative Yield Conundrum for Fixed Income Investors

The flipside of the 30-year bond market rally is that developed market bond yields have been decreasing to record low levels and more recently even into negative territory. This poses a major problem for fixed income investors, which in some cases is materially exacerbated by the high cost of hedgi ...

Trump Put to Lower Dollar - Axel Merk (25/07/2018)

July 25, 2018 Has President Trump introduced a Trump Put by lashing out about rising interest rates and calling for a weaker dollar? The market reacted swiftly - and rationally - albeit not the way Trump had intended. Let me explain. Trump suggests the U.S. is put at a “disadvantage” given that ...

BVTV: Carry, valuations and fundamentals – the pillars of currency investing

Emerging market currencies have been back in the spotlight in recent weeks after significant repricing – so it seems like a good time to lift the lid on how we think about currency trading. While there are many different aspects to take into consideration, there are three key factors – carry, v ...

Underpricing Of Rate Hike Expectations - Axel Merk (08/06/2018)

June 8, 2018 Ask me what I am currently most enthusiastic about in the markets, and I’ll tell you it is the underpricing of rate hike expectations. Let me elaborate on why, what it means for investors’ portfolios and how to possibly profit from it. Why rate hike expectations may be underpric ...

Flattening Yield Curve is Good - Axel Merk & Nick Reece (17/05/2018)

May 17, 2018 In recent months, pundits have cautioned about a flattening yield curve, suggesting it may signal the end of the economic expansion, the end of the bull market, possibly even the end of the world as we know it. There's plenty to worry about in the markets, but in the spirit that knowle ...

Why Cross-Currency Bond Yield Spreads Do Not Matter

I have been running into cross-market yield comparisons in the news flow in recent weeks. For example, the raw U.S. Treasury/German bund yield spread often comes up in valuation discussions.The simple rule of thumb is that one should never make such cross-currency yield comparisons; they only mat ...

“Gold is Currency, Period!” - Rory Hall

December 4, 2017 Over the past couple of weeks, we have been focused on Russia and their understanding of gold and why gold is going to come back to the table of regional and/or international trade. It may even make a grand re-entrance as backing for a national currency or two. Russia, with her ...