In a context of predictably very low long-term returns on the main assets (both financial and non-financial), many investors are turning their attention to currencies as an additional source of profitability or an opportunity to diversify their investments. But how is the best way to invest in currencies?
The first thing is to try to remain calm and not get carried away by your emotions in these volatile and complicated times, which will probably continue to condition the behaviour of the markets in the coming months.
The substantial fiscal and monetary stimuli being implemented around the world are from our point of view essential to counter the strong negative effects of the paralysis we are currently suffering from in many segments of the economy.
The most important, considering that it is the international reference currency and the most used, is the US dollar, but which is the strongest?erte?
The Argentine authorities seek to extend the maturities of more than 100 billion dollars of government debt, which includes over 50 billion of the International Monetary Fund (IMF).
Las autoridades monetarias estadounidenses han recortado un 0,25% las tasas oficiales de la mayor economía mundial, situando el precio del dinero en el rango 2,25% - 2,00%.
Based on the Federal Reserve Bank of New York index, the probability that the United States will fall into recession in the next twelve months has increased significantly.
The difference between a strip bond and a traditional one is that a strip is a zero coupon bond, i.e. it does not pay coupons as these are included in the price. Therefore, strip they have a longer duration. For 30Y treasury bonds the duration or sensitivity to movements in interest rates is just under 20 years, while for strip bonds with the same maturity it is close to 30.
During 2018 we witnessed a stronger divergence of behavior between the United States and the rest of the countries. The US stock market registers a revaluation close to two digits, while other markets such as emerging countries or Europe, are in negative positions.
The immediate answer could be that a low unemployment rate is good for the stock market. In the last few years, the unemployment rate has registered a marked decrease in the main geographical areas and has reached historical lows. One of the questions arising from these circumstances refers to the impact of these employment rates on equity performance.
The volatility on the stock markets produces some alarm among investors who are speculating about the causes of the falls. Many clients have called us and expressed typical concerns regarding these events. Hence, in the Markets Department at BBVA in Switzerland we feel it would be interesting to explain what factors affect stock market prices.
In this survey we shall try to identify the main differences between traditional sovereign bonds and Treasury inflation-protected securities (or TIPS), and to do so we shall focus on the US market, although the conclusions may be extrapolated to other key markets such as Germany, the UK, etc.
The authorities, the various institutions and investors are surprised and wonder what is causing inflation in developed countries has remained at all-time lows since the outbreak of the crisis in 2008.
Bearing in mind that consumer confidence in the USA has shot up over recent years (to even stand above the levels prior to the start of the 2008 crisis), it gives every indication that worker remuneration in the world’s biggest economy is going to start rising strongly over the coming quarters.
Despite the volatility and uncertainty reported worldwide in the first three months of the year, the major leading indicator, the US manufacturing index (ISM) is indicating that this country is going to undergo an improvement in its economy over the coming quarters.