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Please find attached our weekly newsletter, The Context, from Financial Intelligence. The Context contains a selection of thought leadership articles from around the globe, spanning a host of asset classes to give you value-added insight into key themes affecting fund flows, macroeconomics, and markets. As always, all feedback is greatly appreciated, so please do get in touch if you have any comments or suggestions. We hope you find it useful!

For the pdf, please click THE CONTEXT.

Recommended Articles

  • IGM Credit, IGM FX and Rates

    China Insight: Implications of CGB Inclusion in The WGBI

    By Tim Cheung 25 Sep 2020

    As widely expected, FTSE Russell on 24 Sep in the New York afternoon announced that China Government Bonds (CGBs) will be included into the World Government Bond Index (WGBI), effective Oct 2021. Major investment banks estimate that CGBs would receive a weighting of around 5.7% in the WGBI. Assuming AUMs benchmarked to WGBI index is around USD2.5tn, the inclusion would result in USD142bn inflows to the CGB market. Assuming the phasing-in will last for 20 months, same as the time frame set for Bloomberg Barclay's Global Aggregate Index inclusion, CGBs will receive USD7bn inflows per month as a result of WGBIs month-end rebalancing. Once included, China will become the second highest-yielding country in the WGBI (chart 1), which should be very appealing to yield-seekers.

    Topics Industry News

  • IGM FX and Rates

    EM FX Viewpoint: Upside risks to Usd/Mxn are greater after Q3 leading slide

    22 Sep 2020

    Since the start of Q3 the Mexican Peso has been the best EM currency performer vs the USD, rising over 7.0%. However, as an EM sentiment bellwether the MXN may well have had its best run. There is also the risk of a credit rating downgrade to junk which could spur huge outflows. For more read our EM FX Viewpoint Blog >

    Topics Industry News

  • IGM FX and Rates

    Asian FX focus: Can IDR play catch up in Q4?

    22 Sep 2020

    In this piece we highlight the underperformance of IDR FX within the USD/Asia bloc in Q3. We outline the likely drivers of this underperformance, with pay back from an exceptional Q2 performance, central bank intervention to accumulate USDs and weaker seasonality (particularly in August and September), as the most likely drivers. Lack of offshore capital inflows into the local bond market was also a contributor. Looking ahead into Q4 we argue that IDR can play catch up with the stronger EM Asia FX trend. Seasonal headwinds should dissipate, the central bank should be more comfortable with appreciation and guard against a break above 15000, whilst there is ample scope for offshore investors to re-allocate to Indonesia, given attractive real yields on offer and dovish Fed backdrop. We recognize that global equity market sentiment is weaker now, but USD/IDR spikes should be used as opportunities to average into a short USD position. Read more...

    Topics Industry News

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