Liquidity in Hong Kong: Why is the Hang Seng over performing?

Posted on 29. Oct, 2012 by Jean Jacques Ohana in Weekly Focus

Since the Federal Reserve QE3, capital inflows have crowded into Asian markets and specifically Hong Kong. Under the currency board system adopted by the Hong Kong Monetary Authority (HKMA), the Hong Kong dollar is permitted to trade between 7.75 and 7.85 to the US Dollar and a breakthrough of the range triggers intervention by the [...]

What could wake up the stalling gold?

Posted on 22. Oct, 2012 by Jean Jacques Ohana in Weekly Focus

Given the coordinated quantitative easing undertaken by Central Banks, the sharp correction of gold vs. all paper currencies is surprising to say the least. The gold is worth less than it was just before the Federal Reserve announced an open ended QE III, whereas the decision undoubtedly surprised market participants.

The gold rise has stalled so [...]

How to invest in a trendless environment?

Posted on 15. Oct, 2012 by Jean Jacques Ohana in Weekly Focus

Following coordinated political interventions and successive Central Banks liquidity injections to stabilize the financial system, financial markets are more constrained than ever.

Following the EURCHF floor set up by the SNB, several currencies pairs have been stuck in tight ranges (EURNOK, EURSEK, USDBRL, USDJPY …). The near zero rates environment is an attractor magnet which constrains [...]

Hedge fund performance: alpha or beta?

Posted on 08. Oct, 2012 by Jean Jacques Ohana in Weekly Focus

Is hedge funds’ performance the reflection of managers’ skill or the premium associated to different forms of liquidity and tail risks?

By looking at figures 1 to 3, we realize that the average hedge fund performance looks more and more like the one of a short put on the S&P 500, with low correlation to equities [...]

Is India set to become the new engine of world growth?

Posted on 03. Oct, 2012 by Jean Jacques Ohana in Weekly Focus

Since the QE3 announcement, the leading risky asset is neither a commodity nor a US or Chinese asset, it is the Sensex, the Indian equities market (figure 1). The sharp rise of the equities market has gone together with a strong recovery of the Indian Rupee vs. the US Dollar from depressed levels as showed [...]

Lessons from the recent oil flash crash

Posted on 01. Oct, 2012 by Jean Jacques Ohana in Weekly Focus

The commodities price action of the past week has been particularly revealing on the current markets dysfunctioning. On Monday, on no news, the Brent dropped by almost 3% in a few seconds, just a few moments after grains collapsed by approximately the same amount, probably on improved soybean supply outlook in South America (see Figures [...]