Now we all know that the Big Mac index, which was invented 1986 by The Economist, is a very simplified and blunt way of evaluating Purchasing Power Parity. Nevertheless, it is an easy to use method of putting current rates quickly into perspective. It is certainly lacking a lot of other important facts as it doesn’t adjust local labour or transport costs, local preferences, rent […]
It is a well known and flexible strategy to sell options in currency pairs to collect the premium and therefore create yield. The strong decline in volatility and interest rates over recent years though made it less and less attractive. On the other hand, levels of certain currencies/currency pairs and their volatility and interest rate levels currently do signal very appealing opportunities. The beauty of […]
Another hit for Prime Minister Johnson by the supreme court suggests dead end again in the United Kingdom. The only logical way out for non-UK observers seems to be new general elections and possibly a new referendum. It is not that easy though. Whatever the outcome might be needs more time certainly beyond October 31st. But will elections or new referendum really bring more clarity? […]
Markets tend to move in cycles and there is an unlimited amount of more or less successful strategies in the markets trying to cope with these cycles. Currently trend followers like us are having hard times as there is no or no significant trend in place. It is as hard for the manager as for the investor because you question your models more than once […]
Turkish Lira, Mexican Peso, South African Rand and Russian Rubel have one thing in common: They pay much more yield than the major currency pairs. Now, there is obviously a reason for that. these currencies have not exactly performed well over the recent history and the political situation in the respective countries is fragile. Nevertheless, carries add up and whilst there is a significant risk […]