The FOMC will not suffice to provoke a global interest rates rise

Posted on 24. Mar, 2014 by Jean Jacques Ohana in Weekly Focus

As analyzed by the Fed watcher, Tim Duy, the FOMC was perceived significantly more hawkish than expected. The unemployment trigger (6.5%) was dropped but the FOMC has also renounced to accept an inflation rate 0.5% above the long term objective of 2%. Tim Duy thinks that the 2% inflation level is no longer a target [...]

Why shorting US government bonds is not a good idea

Posted on 29. Jul, 2013 by Jean Jacques Ohana in Weekly Focus

The reward of government bonds is made of three parts:

The difference between the yield and the funding rate (assuming that no Fx risk is kept and that the currency is funded at the Libor short term rate).

The curve roll down, which is derived from the steepness of the curve at the point of the yield [...]

Bonds deleveraging and spring clean up

Posted on 03. Jun, 2013 by Jean Jacques Ohana in Weekly Focus

We have downplayed the bonds’ deleveraging stating that the objective of Central Banks, and the Federal Reserve in particular, was to maintain negative real interest rates. Meanwhile, the interest rates have sharply risen in the US.

The rise in interest rates is for sure not related to doubts about US solvency (as the US CDS drifted [...]

Commodities dismal performance conveys global deflation pressure

Posted on 02. Apr, 2013 by Jean Jacques Ohana in Weekly Focus

Despite supportive liquidity and global monetary easing from Central Banks, commodities have been unable to perform since 2011. Commodities had the worst returns among every asset class over the past 250 days. Commodities, currencies and basic resources equities sectors have been under pressure, as illustrated by figure 2.

The poor performance of cyclical markets such as [...]

Revisiting the anti-euro crisis portfolio

Posted on 22. Jun, 2011 by Steve Ohana in Weekly Focus

Despite the agreement reached on a “voluntary participation” of private creditors to the Greek debt refinancing, the solvency risk stays intact. Absent a comprehensive debt restructuring, the euro zone debt problem will not find a definitive resolution.
In this context, instability in the euro zone has resurfaced. The wave has started from OECD Sovereign debt and [...]

Will commodities eventually rise following addictive monetary policy?

Posted on 02. Sep, 2010 by Jean Jacques Ohana in Weekly Focus

The monetary policy in the US and in G10 countries has been complacent, driven by the purchase of Government Bonds and MBS Securities (Fed and BOE alike) or unlimited credit facilities to the banking system (ECB).

And with the Quantitative Easing unfolding, the Central Banks balance sheets are likely to rise in the US and in [...]

G10 solvency issues to come back on the front stage

Posted on 31. Aug, 2010 by Jean Jacques Ohana in Weekly Focus

Dear all,
We are happy to publish Riskelia’s Radar as of today :
Riskelia Reporting – 30 August 2010
This market intelligence tool is refreshed on a weekly basis and can be subscribed from Riskelia. The report brings to light anticipative trends and bubbles indicators as well as risk aversion on every asset class. We hope you [...]

Hanging over the cliff

Posted on 17. Aug, 2010 by Steve Ohana in Weekly Focus

Last week, our global risk indicator flipped back to positive values after a two-week journey in negative territory. As a result, our cumulative risk indicator swings between confirming and invalidating the upward trend in risk aversion that has set off since April 2010. The former eventuality would pave the road to more spirals of defiance [...]

Financial crash probability has receded

Posted on 29. Jul, 2010 by Jean Jacques Ohana in Weekly Focus

Banks stress tests have proved to be a non event. Everyone knew the results in advance: overall the solidity of the banking sector has been supposedly established and only seven banks out of 91 failed the exam. The stress tests were not too stringent as sovereign bonds held to maturity have been excluded from the [...]

The global asset deleveraging: is there any “safe haven” left?

Posted on 04. Jun, 2010 by Jean Jacques Ohana in Weekly Focus

Despite the recent risky assets’ rebound, assets linked to the Chinese growth have remained very weak in the recent days: in particular, the Chinese stock market and base metals are now in a bearish trend. What is more worrying is the synchronization of the trend indicators across different asset classes as demonstrated by the [...]