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Cash positioning for an upwards rate shock

3 May 2022Funds, Risk Commentarycash, Federal Reserve, inflation, money market funds, repo lendingNick Dunbar

While the Federal Reserve anticipates 2-3% interest rates will be enough to combat inflation, the choice of cash holdings for financial institutions provides a clue to their confidence in the Fed’s strategy. The evidence shows that they expect a bumpy ride.

Taperchase

9 December 2021Articles, Economics, Risk Commentaryinflation, quantitative easingNick Dunbar

What happens when inflation and quantitative easing collide? Despite the taper talk, QE isn’t going away soon.

Archegos, deleveraging and the instant bear market

12 August 2021Fundscounterparty credit risk, equities, hedge fundsNick Dunbar

Using Credit Suisse’s Archegos report, we explore how without any fundamental change in corporate earnings or economic sentiment, deleveraging mechanisms can produce an ‘instant bear market’

Italian derivatives opera

10 February 2021Articles, Risk Commentaryinterest rate swaps, litigation, sovereign debt, swaptionsNick Dunbar

Italian courts are prosecuting former officials involved in derivatives terminated by Morgan Stanley nine years ago. But the US bank actually did Italy a favour, unlike the country’s other sovereign counterparties.

Revenge of the minnows

24 November 2020FundsNick Dunbar

Rampant gigantism in the stock market took a blow recently as small-cap stocks enjoyed a run of outperformance. Is this the return of value?

Risky Finance – review of the decade

31 December 2019ArticlesDevil's DerivativesNick Dunbar

A review of the top ten articles published in the last ten years

Smart Beta and Dumb Optimisation

28 June 2019FundsNick Dunbar

Portfolio optimisation has transformed investing in recent decades. But according to a new paper, naive application of such modelling can lead to extreme or unstable trading strategies.

Inside China’s real estate bond boom

21 June 2019ArticlesNick Dunbar

As trade tensions worsen, dollar-denominated bond issuance by Chinese real estate companies is at a record high, while credit spreads have tightened.

Leveraging the Powell put in US M&A markets

21 June 2019ArticlesNick Dunbar

With a softening approach from central banks, borrowing-driven M&A is being rewarded

Where would the market be without share buybacks?

4 January 2019Articlesequities, S&P 500Nick Dunbar

The decline in equity markets seen in the last few months would have been worse without the countervailing effect of buybacks. But by how much?

Descending the debt mount...
Inflation-busting is likely to involve a recession...
Regulators zero in on com...
Bank exposures to commodities have reached record ...
Cash positioning for an u...
While the Federal Reserve anticipates 2-3% interes...
Inflation and the corpora...
Inflation is supposed to be good for corporate bon...