Bonds
HKMA’s Exchange Fund posts record high investment income
Strong performance in equities and currency effects drove record investment result in the first half of 2017
Bank of Japan cuts inflation forecast as policy remains on hold
The BoJ cuts its forecast for prices as it struggles to hit its inflation target; keeps policy steady
Regulations have net benefit despite cost to dealers – BoE paper
Working paper finds leverage requirements have raised costs for dealers in normal times, with the impact larger than earlier studies imply
BoJ ups asset purchases to curb bond market pressure
The Bank of Japan has increased the size of JGB purchase operation and announced unlimited purchases of 10-year JGBs at a fixed rate of 0.11%
Da Silva argues for ‘second-best solution’ to climate change
Financial sector must play a “pivotal” role in tackling climate change, but central banks should not be overstretched in the process, the BIS deputy general manager says
Bond sell-off slows as markets digest central bank comments
Upbeat comments from ECB and BoE chiefs trigger brief tantrum, but bond markets now appear to be settling down
ECB paper calls for EU-wide bond-issuing agency
Authors propose the ECB and a bond issuer should work together to stimulate eurozone
Paper explores effects of capital controls on cost of international debt
Restrictions on capital inflows produce “substantial” corporate bond spreads but effects are mitigated for firms in EU or with English legal origins
Central banks build expertise in move to riskier reserve tranches
Growing popularity of reserves tranching is stretching central banks’ capabilities, a new report finds, but they are turning to asset managers and other central banks for help
Venezuela’s central bank devalues bolivar as crisis continues
Bolivar devalued 64% in latest currency auction in an attempt to stem effects of financial crisis; Goldman Sachs comes under fire from opposition leader
Denmark hails success of new primary dealer model
National Bank says new approach has boosted bond market liquidity across a range of metrics
Norges Bank reserves swell, thanks to equity returns
Fixed-income portfolio returns were essentially zero in Q1, but the central bank is able to achieve returns on equity holdings
PBoC and HKMA announce Bond Connect scheme
The current phase only allows overseas institutional investors to invest in China's bond market
Bank of Italy paper finds no evidence of asset over-valuation
Researchers look at data from eurozone, Japan and US from 1980 to 2017
ECB paper looks at PSPP’s ‘flow effects’ on sovereign bond yields
“Flow effects” have limited but real impact, researchers find
BoJ should provide ‘more realistic’ projections – former policy board member
Claims constant overestimation of inflation expectations undermines credibility
European supervisory authorities call for changes to stress test methods
Next European stress tests should simulate yield changes and “interconnectedness”
Central banks eye gold amid global uncertainty
Rising inflation and the unclear impact of Trump administration policies may lead reserve managers to view gold – and inflation-linked bonds – more favourably
Norges Bank’s Nicolaisen: covered bonds can create distortions
Covered bonds are widely seen as a safe asset, but they face risks and could have unintended consequences for markets
BoJ builds on BIS banking statistics
Researchers break down the statistics further, shedding new light on patterns of cross-border banking
Paraguay’s Valdovinos: bond issuance ‘not all about the money’
$500 million issuance was six-times oversubscribed, but the Paraguayan governor says its success lies in the message it sends to investors overseas
Bank Negara Malaysia looks to boost bond market risk management
Malaysia’s central bank discusses ways to enhance the bond market's breadth and transparency with participants; repos could be used to improve liquidity
Italian paper tracks spreads on eurozone corporate bonds
“Fragmentation” has begun to decrease following ECB’s use of QE, researcher says
Reserve manager of the year: Bank of Israel
Israel’s central bank has made breakthroughs in its sensitivity analysis of near-optimal portfolios, as well as making notable gains from its diversification strategy