Due to compliance reasons in my summer internship, I am not able to publish from mid-June to beginning of September. I will be back right after ..read more

27/01/20233 I guess as any person interested in politics or just in what is going on in the world, I follow the 46th President of the United State, President Biden of course, on Twitter. ​ In the past 24 hours President Biden has written two tweets (please see below) on the US unemployment number, which has reached 3.5% - a "the lowest unemployment in half a century" (Biden). So, let me explain my understanding of this number. Source: President Biden Twitter Account, 27/01/2021 First, let me state the obvious the 3.5% unemployment rate is a great news - in the US when people have a job they al ..read more

24/10/2022 Updated on the 24th October 2022, Hope you had a nice weekend – short news this morning, but big news. ​ After Boris Johnson quit the contest last Sunday, Rishi Sunak (former Chancellor) now appears as a considerable favourite to become Britain’s new prime minister. The market reacted well to the news: both 2-year and 30-year UK government bonds are lower at, 3.519% and 3.891% respectively. In addition, the sterling rose 0.3% against the dollar to reach $1.1336 and advanced 0.6% against the euro to 1.525€. ​​ Updated on the 24th October 2022, Source: Yahoo Finance The market’s rea ..read more

First time I am doing this, but I guess it can be fun. We discussed this Pound/US dollar spot curve in macro this week. Send me in DM your interpretation of this spot curve this week - if one is good it will be published. Otherwise, I will just post what we discussed in class. ​ Please find below another graph that might help you. ​ Good luck ​ Second graph for help: *** ​ Thanks a lot to the few who sent an answer !! - I will publish mine as most answers were incomplete (the question was probably a bit hard). ​ First thing first, we define the nominal exchange rate as the domestic price of ..read more

17/10/2022 Source: MarketWatch, 17th of October The new UK chancellor (Jeremy Hunt), has rewritten the government’s tax and spending plans in order to rebuild the government’s fiscal credibility. This includes suppressing parts of Kwasi Kwarteng’s tax cuts and slashing the government’s energy support package. Precisely, Hunt announced the scrapping of £32bn of tax cuts, roughly two-thirds of the £45bn package promised by the government. The market responded positively, and it seems that the market has confidence in Hunt’s capacity to control Britain’s public finances. The 30-year yield trades ..read more

28/01/2023 I already published yesterday, so today is not a "proper news", but just a quick reminder to connect on your FT app on February 1st to see what the Fed announces for the short-term interest rates. ​ The consensus is that the Fed will rise the rates by 25 basis points, less than previously expected, due to the slow down of inflation over the past months. I think that markets have priced in such policy, so such an announce should not have a major impact. ​ However, several economists, including Mohammed El Arian, advocate for the previously planned 50 basis point increase. Reasons ar ..read more

03/10/2022 This news was written by Kavinash Mautadin-Marin. Kavinash Mautadin-Marin is a first year student at Queen Mary University of London studying BSc Economics. What has happened? ​ The British pound has fallen to a record low against the dollar following the major tax cuts announced by the Chancellor of the Exchequer, Kwasi Kwarteng, on Friday 23rd September. Markets did not respond well to his plans to scrap the corporation tax increase from 19% to 25% and reduction in the basic rate of income tax by 1 percentage point to 19%, along with others, resulting in the value of the pound tu ..read more

03/11/2022 Source: Graph from News.Sky.com; data from Bank of England Today, the Bank of England rose its policy interest rates by 0.75 percentage point -a 3 per cent increase-, matching the US Federal Reserve’s increase earlier this week. Although the Bank of England has raised interest rates to their highest point since 2008 , the Bank of England surprisingly insisted that interest rates might not rise as high in the future as anticipated by financial markets: ” We can make no promises about future interest rates, but based on where we stand today, we think [rates] will have to go up by les ..read more

20/10/2022 Updated on the 21st October 2022, Source: Yahoo Finance Today (20th October), the Yen traded at 150 per US dollar, the highest level since 1990 (please see graph above). This 20-year record puts pressure on the Japanese Yield curve control policy (YCC). What is the YCC (Yield Curve Control) Policy? I know it seems like a very long time ago, but up to early 2021, most of the developed economies were facing what they considered to be “too low” inflation. To tackle this problem, several central banks adopted yield curve control. Yield curve control (YCC) involves targeting a longer-te ..read more

12/10/2022 Source: MarketWatch, updated on the 17th of October At 4.08% this afternoon, the UK 10-year UK government bond rate has caught back its decline from this morning (3.991% at its lowest). The 10-year yield had declined following the announcement of the 45% tax cut being reversed. However, it now seems that the market’s focus has shifted to the other tax reduction proposals. I think the UK government is in a very difficult situation. On the one side, Prime Minister Truss was elected on a liberal economic program, focusing on tax reductions, that she must follow. On the other hand, the ..read more