Why inflation breakevens may not reflect ‘true’ of inflation – part 3 02 May 2023 Inflation-linked bonds are regarded as being relatively illiquid. But what does this mean? One nice explanation comes from Barclays Bank “The reason…
This second post will consider the issue of par floors and how they impact real yields. Some sovereign linker markets issue bonds that protect the investor against deflation. Examples include the USA but not the…
This is the first of a couple of blogs that look at why inflation breakevens may not be a measure of ‘true’ inflation. One of the most useful relationships in finance is the Fisher equation. …
Commodity solutions are often structured using correlation-dependent options. Let’s say a car producer wishes to hedge their copper and aluminium costs using a single option. They enter into a 3-month equally weighted basket option. With…
Following a series of posts on LinkedIn, we have been able to compile a document that comprises of a series of short pieces on various financial topics. They have been organised alphabetically and can be downloaded…
Inflation breakevens Introduction The Fisher equation is a way of decomposing a nominal yield into three components: It is expressed as: (1 + nominal rate) = (1 + real rate) (1+ inflation expectations) (1+ inflation…
Understanding Arsenal’s Floating Rate Note Gerald: All I want to do is get you in a straight bloody line! What do I have to do? Horse: Well it’s the Arsenal offside trap isn’t it? Gerald:…
Can highly recommend that pople check out the following book “The Cat and the Banker”. It is written by an ex-colleague Nadir Mehadji who has come up with a creative way of explaining a series…
FMT are delighted to announce the publication of “power: a practical handbook”, which includes a chapter by one of the firm’s principals, Neil C Schofield. From the cover of the book: “With world electricity…
FMT is delighted to announce the publication of a new text by one of the company’s principals Neil C. Schofield. “Equity Derivatives: Corporate and Institutional Applications” is a brand new text that covers the majority…