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Firms' access to credit is the lifeblood of their operations, impacting decisions about investment, hiring, and overall growth. While we often think of credit availability in broad terms, in reality, firms have access to a diverse range of borrowing markets, each with its own unique conditions. A recent note

The yield curve, a graphical representation of interest rates across different maturities, can provide valuable insights into market sentiment and economic prospects. One specific pattern, known as "bear steepening", is often viewed as a harbinger of economic weakness. A bear steepening occurs when long-term interest rates climb faster

A bull steepening refers to a situation where the yield curve steepens primarily due to a decline in short-term interest rates relative to long-term rates. Specifically, a bull steepening occurs when: * Short-term yields fall faster than long-term yields, widening the gap or spread between short and long-term rates. * This is

The term structure of interest rates, also known as the yield curve, is a graphical representation that shows the relationship between the yields of bonds with different maturities (the time until the bond matures) at a specific point in time. This relationship can be visualized as a curve, with the

The real interest rate tells you the actual return or cost of borrowing after accounting for inflation. It provides insight into the true purchasing power gained or lost from an investment or loan. Specifically, the real interest rate = nominal interest rate - inflation rate (see also the Simplified Fisher Equation)

The map below shows the OPEC member countries and their latest annual crude oil production (31 December 2023). OPEC Member Country Oil Production (b/d) 2023 Algeria 1,160,000 Congo 253,000 Equatorial Guinea 79,000 Gabon 220,000 Iraq 4,375,000 Iran 4,084,000 Kuwait 2,

Lagging economic indicators are statistics that typically change after the economy as a whole does. These indicators confirm economic trends that have already been predicted by leading indicators or shown by coincident indicators. Some examples of lagging economic indicators include: * Average Duration of Unemployment (inverted): This indicator reflects the average

What is Global Macro Global macro is an investment strategy used primarily by hedge funds to profit from broad economic and political shifts across the globe. These funds employ a top-down investment approach, starting with an evaluation of the overall global economic landscape and then drilling down by country, region,

A balance of payments crisis occurs when a country is unable to pay for essential imports or service its external debt payments due to a shortage of foreign exchange reserves. The key characteristics of a balance of payments crisis are: * Rapidly falling foreign exchange reserves or reserves being maintained only

Intrigued by the potential for profiting from a rise in interest rates or a decline in bond prices? Shorting US Treasuries offers a way to do just that. However, it's important to understand the different strategies available and the risks involved before diving in. This article explores various