"why on the news it's usually mentioned that tech valuations are more negatively affected by an interest rates increase versus other sectors?"
It's specifically long term interest rates that affect tech/growth companies, since their earnings are supposed to be heavy weighted towards longer maturities.
If short term interest rates spike, other ...
Over the last decade or so, many enterprise technology companies migrated from the license revenue model to the subscription model, also known as SaaS.
Low inflation allows companies to amortize the substantial upfront cost of developing the software products over a long period of time while charging reasonable subscription fees.
With high interest rates, ...
If we talk about tech stocks in general, a majority of their value is tied up in more distant cash flows / terminal value in a standard DCF analysis. So if interest rates go up, the more distant cash flows are impacted more due to the e^(-rt) discounting factor.
The reason tech stocks are seen as 'expensive' is because the P/E ratio for example is measured ...
Here's an example of how exactly FX reference rates are being calculated for the exchange-traded USDRUB pair (USDRUB MCDF Curncy in Bloomberg, USDFIXME=RTS in Refinitiv). In this particular case, it's a 5-minute average of 300 per-second calculated "fixes" each determined as a weighted sum of VWAP and weighted mid-price. The multiple layers of ...
The FX market is incredibly fragmented. There are no 'official' or correct FX rates, rather there is data that is compiled and distributed by reputable sources, such as central banks, or electronic dealer platforms, or even large trading house own pricing data.
This data may well conflict with each other, but it does not mean it is incorrect.
Many central banks publish official spot rates, usually once a day near local-time close.
For example, if you have a non-delivery contract involving Brazil real (BRL), then you most likely get the official BRL PTAX (BRL09) reported by the Banco Central do Brasil on SISBACEN Data System under transaction code PTAX-800 ("Consultas de Câmbio" or ...
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First of all, banks play it both ways. Some banks (JPM especially) are cash-rich and will use their cash (pay depositors 0.00 %) to pick up revenue in the repo markets.
Other banks will use the cash from repo to fund other types of repos. For example, in their prime services business they might be able to do a securted loan to clients for LIBOR +50.
I don't think that article is correct in the explanation.
The FX basis means the difference between the rate you would get from trading a spot vs forward fx trade versus just outright borrowing money.
For example, as bank I could:
Borrow currency X (which I don't have but want)
Lend currency Y (which I have enough of)
Or, I could trade in the ...
What does yield actually represent? - it's just the return on the bond subject to a number of (unrealistic) assumptions. Perhaps a better way to think about it is as a quotation convention like implied volatility.
As an aside, people who think about bonds in price terms are generally those trading credit risky bonds, in my experience.
And as to normal vs. ...
This is a very profound question, actually.
Definitely not 2. This breaks when rates become zero and negative. This works for prices, not for rates. (I wrote more on it here.)
In practice, most people use 1: the yield changed by 0.10% (10 basis points).
This is not ideal either, because what if you're trying to compare this change to a historical change when ...
Buy MXN spot and then swap MXN spot with forward is equivalent to an outright forward in MXN.
Outright forwards are one well established way of implementing the Carry Trade.
Why they prefer to do it in 2 steps rather than one, I don't know.
Sniffing (or stalking) algo indeed detects other algorithms. How does that work in practice?
Imagine the order book for a particular equity is: Bid 1 = 99 (size 10,000), Bid 2 = 98 (size 25,000), Bid 3 = 97 (size 30,000), Offer 1 = 101 (size 10,000), Offer 2 = 102 (size 25,000), Offer 3 = 103 (size 30,000).
So in the example above, the bids and offers are ...
"Would you be able to explain the rationale behind this [buy spot...enter a FX swap where you sell spot and buy it back forward]?"
Very few accounts want to take delivery of a spot position therefore they roll via the swap.
I ran a script to measure the timestamp delta between top-of-book change events on a quote feed for an exchange traded FX contract (~80000 trades per day). The feed itself provides microsecond precision.
7% of top of book changes were less than 10 microseconds apart.
46% of top of book changes were less than 1 millisecond apart.
As you can see from this ...
I would argue (millisecond-resolution aside) not only is it possible but common in FX. Unless you're trading with exactly one counterparty and preagreed sizes, most streams are composites of several liquidity providers and several sizes.
To elaborate: For example in Bloomberg by default you subscribe to the NY composite stream (CMPN), you could disentangle ...
Loosely speaking, by first getting permission from the relevant regulatory authorities. Here is some color on BRL from one bank's EM FX guide:
"[spot] FX transactions must be registered with the BCB and booked against a financial institution authorised to deal FX by the BCB...Interbank transactions between Brazilian financial institutions can be booked ...