The VP Blog

A blog about financial markets and the VP investing framework

Sky-High Corn Price adds to Inflation Pressures

With the US and Chinese trade positions hardening, market sentiment has swung into risk-off mode with oil sliding, equities weak and USTs bid. Moreover, this has further fuelled speculation that the next move at the Fed will be a cut, with the OIS market now pricing...

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Making the Best of the US-China Trade War

With the US-China trade dispute escalating further, we have returned to our previous analysis on export similarity to gauge the potential winners from a prolonged trade war. China’s exports are predominantly low-to-medium tech, which indicates a potentially high...

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Short CAD on Structural and Cyclical Risks to Canada

The time to be most concerned with an economy is when cyclical risks align with the structural ones. In Canada there is evidence this is happening. The most overt structural risk in Canada is the huge household debt-to-income ratio, significantly bigger than the US’s,...

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Fear and Risks of China Selling its USTs Overblown

The spectre of China selling USTs has risen again as trade tensions between the US and China heighten. The basic assumption is that US rates will go sky-high and the USD would plummet. However, there are several reasons to think the net effect would not be so...

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Real-Estate excesses building in UK

Net capital issuance (gross issues less repayments) in the UK has been relatively bumpy since the financial crisis as deleveraging in the financial sector has resulted in prolonged negative net issuance. However, net issuance has turned positive since the beginning of...

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Setback to Turkish Recovery

Having appeared to have passed the worst of the economic crisis, Turkey has faced a fresh bout of turbulence in recent weeks. We have revisited our framework for identifying buying opportunities following an EM crisis to gauge Turkey’s position on the recovery path....

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