THE DEFINITION OF FINANCIAL MARKETS

Types of Financial Market – In preparation for the discussions on how they coalesce, and impact each other in real world events:

• Capital Market – what are traded there
• Commodities Market
• Money Market – the characteristics, and the products traded there
• Derivatives Market – with emphasis on Options and Futures
• Foreign Exchange Market
• Interbank Market

• The difference between primary and secondary market
• Spot and forward market
• What is Over-the-Counter Market – what are typically transacted there

• What qualifies to be called a Bond?
• Why it is also called fixed income?
• Why does the market need Bonds, on top of bank loans?

• The inverse relationship between interest rate and bond price, and how that influences the economy
• Why the bond market matters so much? – its size vs equity; its relationship vs interest rates; its influence over government policies

• How does each feature affect the nature of a Bonds

• How does each one work?

• What does each one measure? How is each one calculated?
• Using examples in the computation of yield
• What is an inverted yield curve, why is the market worried about it?

• From the Gold Standard, to the Bretton Woods System, to Plaza and Louvre Accords, to BREXIT.

• The relationship between the Balance of Payments and the Exchange Rates.
• How Monetary and Fiscal Policies affect the exchange rates.
• How central banks fix the exchange rate and intervene in the forex markets.
• The importance of Foreign Currency Reserves.
• The role of Carry Trades – how they work and how they impact the emerging markets.
• Quantitative Easing – how it comes about, and how it impacts the forex, bond and money markets.

• How the cut in Overnight Policy Rate (OPR) affects the bond market
• The Asian Financial Crisis – based on what the participants have learnt about the above-mentioned markets, to analyse how the Asian Financial Crisis brought about the confluence of all of the financial markets into action – the forex market, money market, stock market, bond market, commodities market, and derivatives market. A wrap up on how the capital and currency controls impacted each of these markets.
• The Subprime Crisis – a study on the origin and causes of the Crisis. How the USD interbank market dried up, how the Quantitative Easing was implemented, how it impacted the bond market, the money market and foreign exchange market. How the Crisis gave rise to Carry Trade activities, and how these impacted the foreign exchange and commodities market.
• Sovereign Bankruptcy – Why it was said that “sovereign countries don’t go bankrupt”. How the bond market, foreign exchange market, money market and stock market are impacted when a sovereign country goes bankrupt.
• How the bond market can frustrate a president’s re-election plans – a study on budget deficit, bond market reactions, impact on the money market, and how bond price and interest rate interact. How these would impact economic growth.
• How BREXIT affected different bond markets

• How and why the Implosion of the Subprime Crisis actually strengthened the USD
• How the South Koreans Played the won-dollar carry trade game
• No right time for strong ringgit?
• Does a cheap currency always boost growth? A study on 44 countries