MarketSaga

Saga of Financial Markets

Fri12152017

Last updateSat, 29 Jul 2017 12am

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Dollar - a Safe Haven?

We have been told repeatedly that US dollar is a safe haven - when crisis come, people will sell their risky assets as foreign investors seek safety in US Treasuries.  Capital flows from overseas lead to out performance by Treasuries and the dollar.  So the dollar is a "safe haven". 

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Why the More Central Banks Print the Less Liquid Markets Become!

A paradox has emerged since the 2008 global financial crisis - the more central banks print, the less liquid markets become!  This is the deduction made by Nouriel Roubini in observing of a series of recent financial shocks in the markets.

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Negative Yield Bond & Its Buyers

Buying negative yield bonds implied that you are paying for the privilege of lending money.  Yes – you are paying to own those bonds.  It is absurd but it is happening now.  The key reason of buying negative yield bonds is about profiting via the currency play.

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Passive Index for Bonds?

Last month, PIMCO's clients pulled $5.6bn from the Total Return Fund, making total outflow since Mr Gross's departure to $110bn.  PIMCO Total Return assets peaked at $293bn in 2013.  As of end of April 2015, Vanguard Total Bond Market Index with AUM of $117.3bn overtook PIMCO Total Return Fund with AUM of $110.4bn to be the world's largest bond mutual fund. Another victory for passive index investing? 

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Swiss Stocks Worst since 1989

On 2015-01-15, the Swiss National Bank (SNB) decided to removed its minimum exchange rate cap of 1.2 Swiss Francs to the Euro introduced 2011 to protect the country from the Eurozone Debt Crisis – with the concern that the Franc would strengthen significantly against the Euro, which would hurt Switzerland’s open economy and hamper exports.  As such, the move shocked the market with Swiss Market Index fell 8.7%, making it the worst day since 1989.

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