Recent Articles

27th July 2015
A closer look at our GBPEUR forecast.



Of the 79 contributors to the Bloomberg FX poll, Validus Risk Management’s GBPEUR forecast (1.25 by the end of Q1 2016) is the most bearish.  In second place, for those who may be interested, is Bayerische Landesbank in Munich, with a forecast of 1.32.


Even though a correction of approximately 10% in eight months might not seem particularly extreme (especially when you consider that GBPEUR has rallied by almost 15% over the last eight months), it clearly places us on the fringes when it comes to forecasting the pound’s performance against the euro over the next few months.    


This is not a position we take lightly.  As a forecaster, humility is a crucial attribute – if your market view differs so significantly from general market consensus, it is worth asking yourself: What might I be missing? 


It is not hard to come up with a list of reasons why GBPEUR may not...

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20th July 2015
Central Bank Zugzwang



"I expect that it will be appropriate at some point later this year to take the first step to raise the federal funds rate and thus begin normalizing monetary policy."

Janet Yellen

Federal Reserve Chair

July 10, 2015



"In my view, the decision as to when to start (the process of normalizing interest rates) will likely come into sharper relief around the turn of the year."


Mark Carney

Governor of the Bank of England

July 16 2015



Zugzwang is a German word meaning ‘compulsion to move’.  It is a term used to describe a situation in the game of chess whereby the obligation to make a move puts a competitor at a distinct disadvantage; a player is said to be “in zugzwang” when whatever move he makes will end up hurting him. 


Comments made by Janet Yellen and Mark Carney in the last few days reflect the fact that they both recognize that they are now in zugzwang. ...

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13th July 2015
Politics 1: Economics 0

The Greek crisis edges towards a ‘resolution’ as geopolitics trumps economic reality…



"The German finance minister seriously wants to push Greece out of the euro; the German chancellor, on the other hand, is very anxious to find a constructive solution.  And it’s like that in many countries."


Werner Faymann

Chancellor of Austria 



"There are known knowns. These are things we know that we know. There are known unknowns. That is to say, there are things that we know we don't know. But there are also unknown unknowns. There are things we don't know we don't know."


Donald Rumsfeld

Former US Secretary of Defense



As dawn broke over Brussels this morning, a tense all-night negotiating session involving Eurozone leaders and finance ministers seems to have resulted in a possible resolution to this phase of the Greek crisis.  Interestingly, the main tensions in these latest negotiations seem to have barely involved the Greeks at all; rather the most...

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