Investing under terms of higher inflation


Author: Dragan Ilkoski

Most expected announcements of the capital markets for several quarters already are those related to the inflation measuring, although it is already evident to everyone at the global level. These data, following the publishing by the central banks (now higher than the projections that the central banks had for year 2021), have serious impact on global markets and determine the investment strategies of all participants. Thus, in the first half of year 2021 we witnessed the tremendous growth of major part of the raw materials, partially caused by speculation motives followed by their large correction, as well as evident repositioning of the global portfolios toward investing into companies with longer history of positive results, excellent market positioning, stable dividend policies and major and valuable brands. These companies, largely part of the still active bull market cycle, were at the margins, on the account of generally young technological companies which were projected to have huge annual growths (in terms of income, market penetration, technological achievements, etc.) in early phase of development with extremely high capital needs and negative financial results. Although the reasons for this “growth to value” rotation could also be identified at many other places, expectations for pacing up the inflation rates and consequent expectations for interest rates growth, which would contribute to lower values of the future discounted cash flows, are surely to be one among the major ones.

During this entire period the largest central banks diligently defended their expansive monetary policies, identifying the growth of the price levels as transitory, mostly caused by the distorted production and distributive chain supplemented by speculative market movements, as well as the increased current consumption as a result of abolishment of the quarantine measures around the world, the vaccination and in general, more free functioning of the entire world population. Despite of the assurances of the central banks, as well as part of the investment world which support the thesis by the central banks for the transitory nature of the inflation (a thesis that the world due to their level of technological advancement and huge labor productivity is in naturally deflator state), the price of the bonds noted certain decline and increase of the interest rate level (e.g. interest rate of the 10 year bonds issued by the USA raised from below 1% at the beginning of 2021, to the level of 1,6% at the moment).

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Economic indicators relevant for the movements of FX markets in the world


Author: Vesna Trajkovska

Volatility of the financial markets, except by supply and demand, is also caused by everyday events, published data, and decisions by significant institutions around the world (central banks, organizations) and a number of economic indicators. Traders and investors at the world markets monitor the changes in the economic calendars and react timely aimed at higher profit realization, while the analysts and the experts are using these in interpretation of the current and future investment possibilities, or shortly, the economic indicators are presenting the health of an economy.

Most frequently monitored and essential for the development of a country are the deposit interest rates, unemployment rate, GDP, price indices, current account balance and other, which have different impact on the foreign markets and decisions by investors.

Currency trading indicates monitoring of the situation in economies where these are domicile. First indicator, which mostly impacts the movement of the financial markets in general around the world, is the federal funds rates published by the central banks by each of the countries, although they are moving at very low level (almost zero) for a longer period of time. Latest information by the US Federal Reserve’s is that two increases of these is planned (current level 0,25%) until the end of year 2023, which caused small increase of USD relative to other currencies, because the signals for increase or decline of interest rates have influence on appreciation or depreciation of the domestic currency. The European Central Bank, following the reduction of the Main Refinancing Rate to 0% in 2016, does not give signals that it would change it in near future, until certain conditions in the economy are not met (growth of inflation and employment). Swiss Central Bank has the lowest interest rate in the world (-0,75%), which has not been changed since 2015, but has intervened on the appreciated Swiss Franc by purchase of foreign currencies, whereby the Bank in year 2020 purchased 110 billion Francs, and 296 million franks were purchased in the first quarter of year 2021.

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ACI Slovenia webinar invitation: ‘2022 Outlook: Risks and Rewards| Wednesday’, 15 December 2021 | 2.30 pm CET time


On behalf of the ACI Slovenia Executive Committee, it is my pleasure to invite you to our webinar, which will be held on Wednesday, 15th December 2021 at 2.30 pm CET time.

The presentation titled ‘2022 Outlook: Risks and Rewards’ will be held by Mohit Kumar, the well-recognized Interest Rate Strategist, who is a Managing Director within the European Interest Rates Strategy Team at Jefferies International Ltd.

After the Q&A session, Rui Correia, Executive Director and Chair of Board of Education at ACI Financial Markets Association will highlight the latest developments in the education of ACI FMA.

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Workshop ALM liquidity – ACI Macedonia


The contents will be as follows:


  • Introduction to ALM – ALM responsibilities in a bank, relations to Treasury, market risk and risk controlling, balance sheet optimization and influence of the COVID-19
  • Internal prices for liquidity risk FTP(LQ), rules and using a in a bank, contingency FTPs, other FTP adjustments and strategy by various influence factors (such as customers’ behavior, sustainability)
  • Identifying the liquidity risk by using FTP(LQ), profitability calculation from liquidity gaps, liquidity buffer
  • Managing liquidity risk in a bank:
  • Methods for mapping the cash-flow of the balance sheet items – replication portfolio for administered products and items without defined maturity
  • Liquidity gaps and measurement of liquidity risk, minimum liquidity definition
  • Liquidity curve and liquidity costs/premiums
  • Cost of funding evaluation by excess of liquidity
  • Liquidity stress scenarios, customers’ behavior influence and idiosyncratic risks
  • Regulatory ratios of liquidity risk (LCR, NSFR)
  • Financial markets products for managing of liquidity risk: money market products (Depo, CD, CP, T-bills, Repo. FX swap), fixed income products (bonds)
  • ILAAP (Internal liquidity adequacy assessment process)
  • Examples and case studies from practice
We will provide you with the PDF documentation before the workshop.