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Yearly Archives
2013
BOJ’s aggressive QE has brought JGBs to negative real yields
The Bank of Japan was able to lower Japanese government bond yields after an unexpected spike earlier this year (see post). The 10yr JGB is now yielding around 70bp, corresponding to about minus one percent of real yield.
More on the Fed’s haphazard move to forward guidance over QE
Last week in the lead up to the FOMC meeting, I went through why I believed this meeting would mark a shift away from the QE regime. And while the Fed did not taper, indeed we are seeing a greater emphasis on forward guidance as a policy…
Revisiting predictions from 2011 on China and Europe
It is still too early for all of these predictions either to have materialized or to have failed, but I thought it might be useful to review them to see whether or not they have been reasonably accurate in describing unfolding events and,…
Gauging the trajectory of the US housing market
One could argue that home-buyers are ignoring higher rates, but that doesn't seem likely. Is this spike driven by capitulating buyers who had been waiting on the sidelines for mortgage rates to drop? That strategy had certainly worked in…
Implications of the German elections for the economy and markets
Summary: The German elections were a resounding victory for German chancellor Angela Merkel. Nevertheless, she must still broker an agreement for a coalition government and this will change the politics of Germany and Europe. Below are my…
Dollar Broadly Weaker As Fed Keeps Punch Bowl In Place
To put it mildly, the Fed’s dovish surprise has many implications for the market. The first is that the Fed is very concerned about the backup in US rates, and the negative impact on the economy.
- The second major implication is that…