Blog Posts

If you’re a saver or a bond investor, the new reality is that bonds in nearly all developed markets yield around zero percent. They yield a little bit more than zero (but not much) in some developed countries depending on their duration (e.g., US, Australia). But they are zero (e.g., Japan, UK) or negative (e.g., […]

A new supranational issuer is set to enter the European financial markets after the EU summit agreed to a €750 billion recovery fund, known as Next Generation EU (NGEU). Because of pre-existing issues related to stagnating productivity, aging populations, and high sovereign and corporate debt, EU borrowing will continue to increase in excess of output. […]

As we covered in our five-part series on trading emerging markets, Turkey is an emerging market that classically gets into the same balance of payments problem over and over again. Turkey traditionally gets into economic trouble because greater borrowing by domestic corporations pushes up the country’s trade deficit, and the resulting increase in its need […]

This is Part V, and the final part of an ongoing series on how to trade emerging markets. In Part I, we covered the early part of the cycle in emerging market economies. Part II covered the up-cycle leading to the “bubble” phase and the lead-up to the consequent top in the market. In Part III, we […]

This is Part IV of an ongoing series on how to trade emerging markets. Emerging markets are of increasing interest to many traders and investors. Interest rates in developed markets are at zero (or in some cases below zero) with the yield on longer-duration, riskier assets heading down toward those yields as well. Nominal yields in emerging markets are still […]

This is Part III of an ongoing series on how to trade emerging markets. Emerging markets are of increasing interest to many traders and investors as interest rates in developed markets are at zero (or in some cases below zero) with the yield on longer-duration, riskier assets heading down toward those yields as well. In […]

In trading and investing, you’re putting up a lump sum in the expectation that it will produce a stream of income in the future whether through the price movement (especially from a “trading” perspective) or through the cash that it throws off (particularly with respect to “investing”). For it to be enduring over the long-run, […]

In Part I, we covered the early cycle associated emerging market economies. Investors are increasingly interested in emerging markets because of the higher prospective returns associated with them. While interest rates on cash and bonds are virtually zero across the main developed markets – US, developed Europe, and Japan – the prospect of higher returns […]

This article is the first in a series of how to trade emerging markets. It covers the common characteristics of how emerging markets progress financially and economically. For those who do trade actively and especially those who trade over longer time horizons, understanding what part of the cycle you’re in is important. In our last […]

In a recession, the US dollar typically rises. If we look at a chart of DXY (US dollar index), we can see a rise in 2008 due to the subprime crisis. The 2008 USD appreciation ended once the Fed eased in a material way. We’ve seen a bit of the same dynamic in 2020. (Source: tradingview.com) […]