scholarly journals Asia Bond Monitor September 2021

2021 ◽  
Keyword(s):  
Monetary Policy ◽  
Financial Markets ◽  
Negative Impact ◽  
Bond Market ◽  
Social Risk ◽  
Bond Markets ◽  
Financial Conditions ◽  
Market Capacity ◽  
The Us ◽  
Economic Outlook

In the second quarter of 2021, rising COVID-19 cases have cast a shadow over emerging East Asia's growth outlook. Yet the region's financial conditions remain broadly stable amid accommodative monetary policy stances despite some weakening signs. Local currency (LCY) bond markets in emerging East Asia expanded to $21.1 trillion at the end of June, as governments tapped LCY bonds to support recovery measures and contain the negative impact of rising COVID-19 cases. The ASEAN+3 sustainable bond market expanded to $345.2 billion at the end of Q2 2021, accounting for nearly 19% of the global sustainable bond market. The risk to the outlook for regional financial markets remains tilted to the downside. Uncertainty over recovery prospects due to COVID-19, combined with a strong US economic rebound and possible earlier-than-expected monetary policy normalization in the US, could lead to further weakening of financial conditions. This issue of the Asia Bond Monitor features special boxes on emerging East Asia’s economic outlook, market capacity and central banks’ asset purchasing programs, debt build-up, and social risk in developing Asia.

scholarly journals Spillover impact of the US unconventional monetary policy and uncertainties on stock-bond correlations

2020 ◽  
pp. 17-17
Author(s):  
Abobaker Hadood ◽  
Korhan Gokmenoglu
Keyword(s):  
Monetary Policy ◽  
Stock Market ◽  
Nonlinear Effect ◽  
Developed Countries ◽  
Bond Market ◽  
Bond Markets ◽  
Policy Uncertainty ◽  
Unconventional Monetary Policy ◽  
Market Uncertainty ◽  
The Us

This paper investigates the spillover impact of US unconventional monetary policy and uncertainty factors on the time-varying co-movements between the US stock market and 14 advanced countries? bond markets, as based on monthly data from January 2002, to October 2015, and utilising the conditional nonlinear quantile regression approach. The empirical results reveal that US unconventional monetary policy has an asymmetric positive effect on stock-bond market co-movements, with a nonlinear effect in France and Denmark and a strong effect in the UK and Finland. Further, US bond market uncertainty has heterogeneous effects on stock-bond market co-movements, with a nonlinear effect in France and Denmark and a strong effect in Finland and Sweden. In addition, default risk spread positively influences stock-bond market comovements across most countries for all quantiles. In contrast, stock-bond market co-movements negatively and symmetrically respond to the US stock market uncertainty in most countries. Finally, stock-bond co-movements exhibit mixed responses to US economic policy uncertainty across countries. Our results have valuable implications for international investors who allocate capital across developed countries? stock and bond markets. Our findings provide important information for financial communities with regard to diversification and hedging.

Financial conditions and monetary policy in the US

2020 ◽  
Vol 44 (4) ◽  
pp. 100819
Author(s):  
Sel Dibooglu ◽  
Seyfettin Erdogan ◽  
Durmus Cagri Yildirim ◽  
Emrah Ismail Cevik
Keyword(s):  
Monetary Policy ◽  
Financial Conditions ◽  
The Us

scholarly journals Which News Moves the Euro Area Bond Market?

2009 ◽  
Vol 10 (1) ◽  
pp. 1-31 ◽  
Author(s):  
Magnus Andersson ◽  
Szabolcs Sebestyén ◽  
Lars Jul Overby
Keyword(s):  
Monetary Policy ◽  
Euro Area ◽  
Bond Market ◽  
Bond Markets ◽  
Market Responses ◽  
Macroeconomic Announcements ◽  
Bond Futures

AbstractThis paper explores a long dataset (1999-2005) of intraday prices on German long-term bond futures and examines market responses to major macroeconomic announcements and ECB monetary policy releases. German bond markets tend to react more strongly to the surprise component in US macro releases compared with aggregated and national euro area and UK releases, and the strength of those reactions to US releases has increased over the period considered. We also document that the numbers of German unemployed workers consistently have been known to investors before official releases.

Early Turkish elections could upset investor optimism

2017 ◽  
Keyword(s):  
Financial Markets ◽  
Developing Economies ◽  
Commodity Price ◽  
Bond Markets ◽  
Gradual Improvement ◽  
Content Type ◽  
Economic Fundamentals ◽  
Uncertain Outcome ◽  
The Us ◽  
Us Presidential Election

Subject The marked improvement in sentiment towards Turkish assets since mid-January. Significance Despite the uncertain outcome of Turkey’s crucial constitutional referendum on April 16, the lira has risen against the dollar while foreign investors have resumed their purchases of domestic Turkish debt, after months of heavy outflows from the local bond market. The sharp improvement in sentiment towards emerging markets (EMs) this year and the tightening in liquidity by the Central Bank (TCMB) are easing the strain on the country’s financial markets, despite significant domestic and external risks. Impacts Fears of a sharp sell-off in global bond markets following Donald Trump's victory in the US presidential election have not materialised. This is partly because aggressive monetary stimulus in Europe and Japan is continuing to suppress yields. Recent rising oil prices are sustaining the commodity price recovery that has underpinned improved sentiment towards EMs since 2016. EM currencies’ strong performance is partly due to gradual improvement in economic fundamentals in many developing economies.

US rates rift will fuel financial market volatility

2019 ◽  
Keyword(s):  
Financial Markets ◽  
Bond Markets ◽  
Open Market ◽  
Federal Open Market Committee ◽  
Content Type ◽  
Us Economy ◽  
China Trade ◽  
The Us ◽  
Investment Grade ◽  
Global Growth

Subject Financial markets outlook. Significance The decision of the US Federal Reserve (Fed) on September 18 to lower its main policy rate while not assuring investors that it will continue to loosen monetary policy is exposing divisions within the Federal Open Market Committee (FOMC), and between the Fed and bond markets. The ‘hawkish cut’ came with three dissensions, reflecting the disconnect between the resilient US economy and the deterioration in the global growth outlook. Impacts Cautious investor optimism that a US-China trade truce will be struck is fuelling US equity gains, but a substantial deal seems unlikely. The Brent oil price fell back within days following the drone attacks on Saudi Arabian oil facilities, but more short spikes are possible. Almost one-third of investment-grade government and corporate bonds are negative yielding; those with zero lifetime coupon are riskiest.

scholarly journals The Global Green Bond Market in the Face of the COVID-19 Pandemic

2021 ◽  
Vol 5 (1) ◽  
pp. 50-60
Author(s):  
Greta Keliuotytė-Staniulėnienė ◽  
Kamilė Daunaravičiūtė
Keyword(s):  
Negative Impact ◽  
Research Problem ◽  
Bond Market ◽  
Rapid Expansion ◽  
Bond Markets ◽  
Upward Trend ◽  
Bond Index ◽  
Academic Literature ◽  
The Face ◽  
The Impact

This paper summarizes the relevant researches in the area of the green bond market within the perspective of the performance of the global green bond market in the face of the COVID-19 pandemic. Despite the rapid expansion of the green bond market during the last decade, this market has also experienced the consequences of the COVID-19 pandemic. The researches on the effect of COVID-19 and its induced crisis on the green bond markets are still fragmentary; therefore, the main purpose of this research is to evaluate the impact of the COVID-19 pandemic on the global green bond market. To reach the purpose, the methods of literature analysis, and correlation-regression analysis are used. In the first section of the paper, the research problem is presented; in the second part the analysis of academic literature is conducted; in the third part the design of the research is described, and in the fourth part the results of the assessment of the impact of COVID-19 pandemic on the global green bond market are discussed. The results of the research revealed that the spread of the COVID-19 pandemic appeared to have a negative impact on the performance of the S&P Green Bond Index. The market reaction to deaths caused by COVID-19 infection proved to be stronger than the reaction to confirmed cases of COVID-19 infection. However, after a sufficiently significant negative shift, which was observed in the first quarter of 2020, the S&P Green Bond Index regained its upward trend, which continued for the rest of the year.

scholarly journals Spillovers of US unconventional monetary policy: quantitative easing, spreads, and international financial markets

2021 ◽  
Vol 7 (1) ◽  
Author(s):  
Zekeriya Yildirim ◽  
Mehmet Ivrendi
Keyword(s):  
Monetary Policy ◽  
Financial Markets ◽  
Risk Taking ◽  
Large Scale ◽  
Emerging Market ◽  
Spillover Effects ◽  
International Financial Markets ◽  
Quantitative Easing ◽  
Unconventional Monetary Policy ◽  
The Us

AbstractThis study investigates the international spillover effects of US unconventional monetary policy (UMP)—frequently called large-scale asset purchases or quantitative easing (QE)—on advanced and emerging market economies, using structural vector autoregressive models with high-frequency daily data. Blinder (Federal Reserve Bank of St. Louis Rev 92(6): 465–479, 2010) argued that the QE measures primarily aim to reduce US interest rate spreads, such as term and risk premiums. Considering this argument and recent empirical evidence, we use two spreads as indicators of US UMP: the mortgage and term spreads. Based on data from 20 emerging and 20 advanced countries, our empirical findings reveal that US unconventional monetary policies significantly affect financial conditions in emerging and advanced countries by altering the risk-taking behavior of investors. This result suggests that the risk-taking channel plays an important role in transmitting the effects of these policies to the rest of the world. The extent of these effects depends on the type of QE measures. QE measures such as purchases of private sector securities that lower the US mortgage spread exert stronger and more significant spillover effects on international financial markets than those that reduce the US term spread. Furthermore, the estimated financial spillovers vary substantially across countries and between and within the emerging and advanced countries that we examine in this study.

scholarly journals U.S. Monetary Policy and the Global Financial Cycle

2020 ◽  
Vol 87 (6) ◽  
pp. 2754-2776 ◽  
Author(s):  
Silvia Miranda-Agrippino ◽  
Hélène Rey
Keyword(s):  
Monetary Policy ◽  
Financial Variables ◽  
Financial Cycle ◽  
Global Factor ◽  
Financial Conditions ◽  
The Us ◽  
Floating Exchange Rate ◽  
International Credit ◽  
Policy Shocks ◽  
Domestic Credit

Abstract U.S. monetary policy shocks induce comovements in the international financial variables that characterize the “Global Financial Cycle.” A single global factor that explains an important share of the variation of risky asset prices around the world decreases significantly after a U.S. monetary tightening. Monetary contractions in the US lead to significant deleveraging of global financial intermediaries, a decline in the provision of domestic credit globally, strong retrenchments of international credit flows, and tightening of foreign financial conditions. Countries with floating exchange rate regimes are subject to similar financial spillovers.

Fed’s Unconventional Monetary Policy and Risk Spillover in the US Financial Markets

2019 ◽  
Author(s):  
Mehmet Balcilar ◽  
Zeynel Abidin Ozdemir ◽  
Huseyin Ozdemir ◽  
Mark E. Wohar
Keyword(s):  
Monetary Policy ◽  
Financial Markets ◽  
Unconventional Monetary Policy ◽  
The Us

Inflation will worry but not derail financial markets

2021 ◽  
Keyword(s):  
Financial Markets ◽  
Federal Reserve ◽  
Bond Markets ◽  
Content Type ◽  
The Us ◽  
Sustained Increase

Significance The US Federal Reserve (Fed) is largely unperturbed by rising inflation. Bond markets concur, but some investors fear that this could prove complacent -- and costly. Impacts The price of bitcoin fell by 30% since mid-April to USD20,000, partly due to doubts of whether the token is maturing into a stable asset. US banking stocks have surged by over 70% since the vaccine breakthrough on average; strong first-quarter earnings will fuel further upside. Markets have confidence in the Fed, but investors’ fears of a more sustained increase in prices, and of the Fed falling behind, will rise.

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