Bonds
BoJ establishes working groups to consider how to make best use of BOJ-NET
Working group to look at ways to make effective use of settlement system; BOJ-NET to process more transactions across time zones
Jamaica successfully restarts bond market, governor says
Government debt issuance in February was oversubscribed; Wynter hopes surplus liquidity will continue to increase, helping to accommodate ‘crowding-in’ of private investment
Slovakian central bank boosts provisions for financial risks
National Bank of Slovakia records gross profit of €144.6 million in 2015, as both income and operating costs fall
Eurozone sovereign debt crisis has increased financial fragmentation, paper argues
Eurozone corporate bonds have different risk premia according to which country a company is headquartered in, paper argues; fragmentation has ‘dampened effectiveness’ of ECB policy
Argentina inches towards repaying debt
Montreux Partners LP and EM Ltd settle; four creditors yet to agree on removing injunction
BoJ moves to ‘ease stress’ in JGB market
More generous limits applied to securities lending facility designed to alleviate strains in the market for government bonds, though liquidity indicators do not show clear signs of tightening
Illiquidity, concentrated bond holding raise volatility – paper
The volatility of financial market price shocks in the Bund and taper tantrums was aggravated by illiquidity and concentrated holdings of bonds, working paper finds
Ugandan social security fund’s outside investments performing well, CIO says
Gerald Kasaato says investments in Kenya are performing well; greater use of external managers could be ‘very beneficial’ if restriction to East Africa investment is expanded
Riksbank floats new collateral limits
Swedish central bank looks to limit the amount of covered bonds pledged as collateral for intraday credit; assessment suggests limited impact on banks
Blanchard and others look to reconcile theory of capital flows with practice
Revamp of Mundell-Fleming model helps explain apparently contradictory results, with important implications for policy-makers looking to respond to capital flows
Eurosystem’s asset purchase programme should increase growth by 1% annually, paper says
The Eurosystem’s asset purchase programme could increase growth and inflation by 1% annually for two years, a working paper from the Bank of Italy predicts
South Africa aims to launch electronic trading platform this year
A deputy governor of the South African Reserve Bank announces electronic trading platform could be launched in the coming months
National Bank of Denmark confident it possesses ‘necessary tools’ to defend currency
The ministry of finance will resume issuing government bonds in October after measures to stabilise the krone have ‘desired effect’
China to open up interbank foreign exchange market
Central banks will be granted access to China’s interbank foreign exchange market as part of ongoing reforms, Li Keqiang reveals
BoJ predicted to expand QQE, within limits
Analysts are predicting the Bank of Japan will increase asset purchases next month, but researchers are warning of speed bumps ahead
Argentine reserves spared as US court overturns ruling
Central bank will not have to pay creditors out of its reserves, US appeals court rules, although the decision is not meant to allow Argentina to ‘continue shirking’ its debts
BIS paper finds emerging market corporations exploiting carry trade
Study of emerging market foreign currency-denominated bond issuance by Bruno and Shin finds corporations appear to be issuing bonds as part of a carry trade, rather than financing investment
Ukraine strikes debt restructuring deal with main creditors
Agreement would see creditors accept 20% nominal haircut on $18bn worth of debt; finance minister and IMF head hail agreement and stress need for support among bondholders
BIS researchers dissect emerging market fire sales
Working paper picks apart the channels through which asset management impacts on emerging bond markets, finding evidence of procyclical behaviour
RBI paper explores challenges in public debt management
Research identifies a ‘narrow investor base’ as one hurdle and considers how to encourage greater participation from retail investors in the market for government securities
Insurers call for clarity on US agency risk weightings
Capital treatment under Solvency II unclear, say securitisation specialists and insurers
China Treasury bond futures hit by cash equity volatility
Increase in volatility as traders exit positions to fund equity portfolios
US report finds ‘no single cause’ of October 15 volatility in Treasury market
Staff from five bodies, including the Fed board of governors and New York Fed, analyse data from unusual bout of volatility in the US Treasury market last year
Thai Government Pension Fund eyes deeper bond futures market
Thailand's $23 billion Government Pension Fund is one of the institutions that wants to see the country's bond futures market build on the progress already made in equity and forex derivatives