IGM Credit, IGM FX and Rates

China Insight: Liquidity tightens despite easing bond supply

China interbank 7-day repo rate fixing set fresh year-high 3.15% in the week ending 30 October (chart 1), reflecting intensifying funding pressure despite bond supply for the year having already passed its peak...

EPFR - fund flow & allocations data

Tilt to Asia steepens in late October

With the clock ticking down on the US presidential election and COVID-18 cases rising steeply in the US and much of Europe, investors had plenty of reasons to tread cautiously in late October and, for the most part, they did so. Flows to most EPFR-tracked fund groups during the week ending Oct. 28 ranged from subdued to negative. But there was one clear exception: fund groups dedicated to Emerging and Developed Asian markets. The appetite for Asian exposure is rooted in the region’s generally effective response to the pandemic and the trajectory of its recovery anchored by China’s return to positive economic growth. The latest IMF forecast for collective Emerging Asian GDP growth this year is -1.7% versus -4.6% for Emerging Europe and -8.1% for Latin America. During the latest week China Equity Funds took in fresh money for the eighth time in the past 11 weeks, flows to Japan Bond and Equity Funds hit 38 and 79-week highs and both Philippines and Malaysia Equity Funds recorded their biggest inflows year to date.

EPFR - fund flow & allocations data

Quants Corner - The run-up to election day: Reading the fund tea leaves

With less than a week to go before America chooses a president, what are the flow and return numbers saying? The flows and returns for EPFR-tracked funds, that is. Will incumbent Donald J Trump be re-elected? Or Joe Biden voted into office as the 46th President of the United States? Quantitative analysis of fund flows and returns allows us to craft a new factor, which we are calling the Trump Sensitivity Factor, that unlocks political and future performance signals from the data...

IGM FX and Rates

Viewpoint: Lira weakness to persist amid growing geopolitical risks

USD/TRY has breached the 8 handle for the first time ever. For more read our latest FX Viewpoint Blog >

IGM Credit, IGM FX and Rates

China Insight: Reasons behind sustained RMB appreciation

PBOC announced on 10 October that the FX risk reserve ratio for forward USD purchases vs CNY would be lowered from 20% to 0% effective immediately. Before that, PBOC did the same thing in September 2017, leading to a 3-week rally of USD/CNH. However, this time around USD/CNH failed to gain much support from the reduction of the ratio. Instead, the pair resumed downtrend immediately as soon as a 2-day weak rally ended on 13 October. We attribute the sustained RMB appreciation regardless of the said policy change to a couple of factors. First of all, China's balance of payments has been improving more notably this year than in 2017. With China getting the COVID-19 under control more effectively and having its productivity back to normal much earlier, its exports have shown rapid growth since the beginning of summer (chart 1). Meanwhile, from the perspective of capital flow, after experiencing a relatively large capital outflow in March, China saw an encouraging turnaround of the capital flow...

IGM Credit, IGM FX and Rates

The Context 10.26.20

Read more from The Context and subscribe to have it delivered to your inbox each week!

Zephyr Portfolio Analytics, PSN Separately Managed Accounts ...

Ryan Nauman's Weekly Recap: COVID-19 Market Edition 10.26.20

The week ahead marks the last week before the Presidential election, and it will be busy, particularly for earnings releases. The majority of the famed “FAANG” stocks (Facebook, Apple, Amazon.com & Google (Alphabet)) will report their much-anticipated earnings. As for economic data, the red-hot housing market will be on display, with new and pending home sales. We will also see how confident consumers are, as coronavirus cases continue to increase, and we march closer to the election. Finally, business optimism has picked up, which has been evident in an increase in durable goods spending, and we will find out if the spending continued in September. Ryan Nauman's Weekly Recap: COVID-19 Market Edition and subscribe to have it delivered to your inbox each week!

Digital Banking Hub, Digital Banking Research

Will buy-now-pay-later installments transform how consumers use credit cards?

As PayPal and Amazon continue to expand their services within the buy-now-pay-later market, our Head of Omnichannel Experience, Suraya Randawa, asks the question, “Will installment payments transform how consumers use credit cards?” Blog: 3min read

EPFR - fund flow & allocations data

Emerging Markets Funds retain their momentum

Investors committed fresh money to both Equity and Bond Funds for the third straight week going into the second half of October despite rising COVID-19 caseloads in Europe and North America, the looming US presidential election and worrying unemployment trends that halted the latest rally in global equity markets. Investors showed the greatest conviction when it came to the US and emerging markets, with US Equity and Bond Funds absorbing a combined $18.7 billion while Emerging Markets Equity Funds extended their longest inflow streak since January and Emerging Markets Bond Funds posted their 14th inflow in the past 15 weeks. The second week of October also saw US Money Market Funds surrender another $26 billion, bringing total outflows from this fund group since mid-May to $225 billion. Over the same period, meanwhile, Europe Money Market Funds have absorbed over $100 billion. Those funds have also seen a modest rotation from UK to Europe ex-UK Money Market Funds as the deadline for a post-Brexit trade agreement between the UK and EU draws closer with limited signs of progress.

IGM FX and Rates

Viewpoint: EM Asia FX markets - priming for a Blue Wave

As the US election draws closer, FX markets have started to aggressively price in the prospect of a Blue Wave, Democrat control of the White House, Congress and Senate; providing a good lead on medium term USD direction. Here, we take a closer look at the outlook for Asian currencies on a Biden win or surprise Trump victory, correlations and what has already been priced in…

LendersBenchmark™ - Financial Lending Analytics, Financial I...

Consumer Bankers Association and FBX present: All The Answers Webinar

EPFR - fund flow & allocations data

Quants Corner - Japan: ex-Asia but not ex-Alpha

For decades, global investors have become conditioned to the term Asia ex(cluding) Japan. It’s a term that reflects Japan’s individual place in the current investment universe. In this week’s Quants Corner, we illustrate how Japan’s stock market is different - from a fund flow perspective – compared to the rest of Asia, and how we can generate alpha at a stock level in such a unique market.

LendersBenchmark™ - Financial Lending Analytics

Consumer Bankers Association and FBX present: All The Answers Webinar

Well, of course we don’t have all the answers… but, we can provide Lenders and Investors the tools and approach needed to navigate this pandemic environment with success. Our insight and expert analysis in the consumer lending industry will help you better understand how to move your company forward into 2021 with precision and confidence. This webinar content covers: 1. Where is the demand for lending (which customer segments are willing to borrow money)? 2. Where is supply for lending (which segments show lenders willing to lend money or investors willing to buy loans)? 3. At what price are loans booked (and does that provide enough margin for potential future losses)? 4. What you need to do to be prepared for growth and success in 2021

IGM FX and Rates

Viewpoint: Downside Risks Crystalising in UK?

This weeks report highlights; Risks skewed towards more expansive policy, Public health/economy trade-off - repeat of 1918?, Virus prevalence critical and Uncertainty caused by re-allocation of spending across time & sectors…

Digital Banking Research

Webinar: How To Leverage Digital Body Language For Success (Recording)

FBX and Neuro-ID unveil Human Analytics™, the science behind interpreting online behavior, that when applied, can: - Create seamless and frictionless onboarding journeys - Detect real-time fraudulent application behavior - Recapture what was lost for customers forced to adopt digital With Human Analytics™, you can pinpoint friction points within your forms and processes, to convert more customers and detect real-time fraudulent behavior.