Is the Fed late in hiking? Is the Phillips Curve still alive in this millenium, aging ‘baby-boom’ generation?

"In our view, the US economy has now reached full employment and is likely to overshoot meaningfully, a path that has often proven risky. From this perspective, the case for further tightening is strong." Yes, these are statements you typically see in an IB research notes or even from central bankers such as BoJ's Harada who... Continue Reading →

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Basel I Minimum Capital Requirements

In the business of taking risk on both sides of the balance sheet, holding capital is necessary to provide protection against unexpected losses. This is not the same as expected losses, which are covered by provisions, reserves and current year profits. Basel I map out the risk weights for any credit (counterparty) exposure for on-balance sheet assets, as well as further... Continue Reading →

FRM part I review (May 2017, Singapore)

Finally, after weeks of intensive study of financial concepts from a non-finance major undergraduate, I managed to get through this. Why FRM, not CFA? If you take a look at the FRM 2017 learning objectives, you will realise that GARP does not make reference to books from CFA (the exam provider herself) but references authors who are... Continue Reading →

Reconciling interest rate parity and the real world

We all ever once heard contributors at Bloomberg talked about ineffectiveness of the Taylor rule to prompt Fed hiking earlier, or your macroeconomics professor talking on Purchasing Power Parity and Interest Rate Parity. Seems like a knowledge that would allow an undergraduate to make side incomes from tracking the rate differential. But that's unlike reality... Continue Reading →

Non-Farm Payroll (NFP) Part I

What's NFP? NFP indicates the net hiring/firing of non-farmer workers for the previous month. It is published by the Bureau of Labour Statistics, usually on the first Friday of the month, in the Employment Situation Report. Some traders would lament that the attention shown on a headline figure is overstated. NFP headline and report significance really... Continue Reading →

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