A pension manager’s view of exchange traded funds from São Paulo to Santiago

This paper examines the current Chilean and Brazilian pension markets, how these pension markets are structured, how they have historically invested their portfolios in ETFs and how they utilize Exchange Traded Funds (ETFs). This investigation will give an overview of the current pension landscape in each country, ETFs and ETF managers in the region, as well as distribution allowances and regulations for ETF providers within the region. Finally it will offer insights throughout that will be useful to those building a business or creating an expansion plan in Brazil or Chile.

In search of exchange rate predictability : a study about accuracy, consistency, and granger causality of forecasts generated by a Taylor Rule Model

Este estudo investiga o poder preditivo fora da amostra, um mês à frente, de um modelo baseado na regra de Taylor para previsão de taxas de câmbio. Revisamos trabalhos relevantes que concluem que modelos macroeconômicos podem explicar a taxa de câmbio de curto prazo. Também apresentamos estudos que são céticos em relação à capacidade de variáveis macroeconômicas preverem as variações cambiais. Para contribuir com o tema, este trabalho apresenta sua própria evidência através da implementação do modelo que demonstrou o melhor resultado preditivo descrito por Molodtsova e Papell (2009), o “symmetric Taylor rule model with heterogeneous coefficients, smoothing, and a constant”. Para isso, utilizamos uma amostra de 14 moedas em relação ao dólar norte-americano que permitiu a geração de previsões mensais fora da amostra de janeiro de 2000 até março de 2014. Assim como o critério adotado por Galimberti e Moura (2012), focamos em países que adotaram o regime de câmbio flutuante e metas de inflação, porém escolhemos moedas de países desenvolvidos e em desenvolvimento. Os resultados da nossa pesquisa corroboram o estudo de Rogoff e Stavrakeva (2008), ao constatar que a conclusão da previsibilidade da taxa de câmbio depende do teste estatístico adotado, sendo necessária a adoção de testes robustos e rigorosos para adequada avaliação do modelo. Após constatar não ser possível afirmar que o modelo implementado provém previsões mais precisas do que as de um passeio aleatório, avaliamos se, pelo menos, o modelo é capaz de gerar previsões “racionais”, ou “consistentes”. Para isso, usamos o arcabouço teórico e instrumental definido e implementado por Cheung e Chinn (1998) e concluímos que as previsões oriundas do modelo de regra de Taylor são “inconsistentes”. Finalmente, realizamos testes de causalidade de Granger com o intuito de verificar se os valores defasados dos retornos previstos pelo modelo estrutural explicam os valores contemporâneos observados. Apuramos que o modelo fundamental é incapaz de antecipar os retornos realizados.

EU-Mercosur trade relations: impacts of exchange rate misalignments on tariffs

The issue of “trade and exchange rate misalignments” is being discussed at the G20, IMF and WTO, following an initiative by Brazil. The main purpose of this paper is to apply the methodology developed by the authors to exam the impacts of misalignment on tariffs in order to analyse the impacts of misalignments on the trade relations between two customs unions – the EU and Mercosur, as well as to explain how tariff barriers are affected. It is divided into several sections: the first summarises the debate on exchange rates at the WTO; the second explains the methodology used to determine exchange rate misalignments; the third and fourth summarises the methodology applied to calculate the impacts of exchange rate misalignments on the level of tariff protection through an exercise of ‘misalignment tariffication’; the fifth reviews the effects of exchange rate misalignments on tariffs and its consequences for the trade negotiations between the two areas; and the last concludes and suggests a way to move the debate forward in the context of regional arrangements

Trade regulation of exchange rates

O presente estudo busca analisar o quadro regulatório internacional referente a medidas cambiais que trazem impactos no comércio. O artigo pretende explorar como a questão do câmbio se relaciona à OMC e afeta seus instrumentos e princípios para, em seguida, buscar dispositivos nos Acordos da OMC que poderiam ser aplicados à questão cambial a fim de reequilibrar os impactos causados pelos desalinhamentos cambiais no comércio internacional

The impact of exchange-rate and trade policy on export performance in the 1980s

Includes bibliography

Robust isothermal electric control of exchange bias at room temperature

Voltage-controlled spin electronics is crucial for continued progress in information technology. It aims at reduced power consumption, increased integration density and enhanced functionality where non-volatile memory is combined with highspeed logical processing. Promising spintronic device concepts use the electric control of interface and surface magnetization. From the combination of magnetometry, spin-polarized photoemission spectroscopy, symmetry arguments and first-principles calculations, we show that the (0001) surface of magnetoelectric Cr2O3 has a roughness-insensitive, electrically switchable magnetization. Using a ferromagnetic Pd/Co multilayer deposited on the (0001) surface of a Cr2O3 single crystal, we achieve reversible, room-temperature isothermal switching of the exchange-bias field between positive and negative values by reversing the electric field while maintaining a permanent magnetic field. This effect reflects the switching of the bulk antiferromagnetic domain state and the interface magnetization coupled to it. The switchable exchange bias sets in exactly at the bulk Néel temperature.

Formation of Exchange Rates on the Russian Market: Dynamics and Modelling

Galina Kovaleva. The Formation of the Exchange Rate on the Russian Market: Dynamics and Modelling. The Russian financial market is fast becoming one of the major sectors of the Russian economy. Assets have been increasing steadily, while new market segments and new financial market instruments have emerged. Kovaleva attempted to isolate the factors influencing exchange rates, determine patterns in the dynamic changes to the rouble/dollar exchange rate, construct models of the processes, and on the basis of these activities make forecasts. She studied the significance of economic indicators influencing the rouble/dollar exchange rate at different times, and developed multi-factor econometric models. In order to reveal the inner structure of the financial indicators and to work out ex-post forecasts for different time intervals, she carried out a series of calculations with the aim of constructing trend-cyclical (TC) and harmonic models, and Box and Jenkins models. She found that: 1. The Russian financial market is dependant on the rouble/dollar exchange rate. Its dynamics are formed under the influence of the short-term state treasury notes and government bonds markets, interbank loans, the rouble/DM exchange rate, the inflation rate, and the DM/dollar exchange rate. The exchange rate is influenced by sales on the Moscow Interbank Currency Exchange and the mechanism of those sales. 2. The TC model makes it possible to conduct an in-depth study of the structure of the processes and to make forecasts of the dynamic changes to currency indicators. 3. The Russian market is increasingly influenced by the world currency market and its prospects are of crucial interest for the world financial community.

Clinical and radiographic outcomes at 2 years and the effect of tocilizumab discontinuation following sustained remission in the second and third year of the ACT-RAY study

OBJECTIVE To assess the efficacy and safety of tocilizumab (TCZ) plus methotrexate/placebo (MTX/PBO) over 2 years and the course of disease activity in patients who discontinued TCZ due to sustained remission. METHODS ACT-RAY was a double-blind 3-year trial. Patients with active rheumatoid arthritis despite MTX were randomised to add TCZ to ongoing MTX (add-on strategy) or switch to TCZ plus PBO (switch strategy). Using a treat-to-target approach, open-label conventional synthetic disease-modifying antirheumatic drugs (csDMARDs), other than MTX, were added from week 24 if Disease Activity Score in 28 joints based on erythrocyte sedimentation rate (DAS28-ESR) >3.2. Between weeks 52 and 104, patients in sustained clinical remission (DAS28-ESR <2.6 at two consecutive visits 12 weeks apart) discontinued TCZ and were assessed every 4 weeks for 1 year. If sustained remission was maintained, added csDMARDs, then MTX/PBO, were discontinued. RESULTS Of the 556 randomised patients, 76% completed year 2. Of patients entering year 2, 50.4% discontinued TCZ after achieving sustained remission and 5.9% achieved drug-free remission. Most patients who discontinued TCZ (84.0%) had a subsequent flare, but responded well to TCZ reintroduction. Despite many patients temporarily stopping TCZ, radiographic progression was minimal, with differences favouring add-on treatment. Rates of serious adverse events and serious infections per 100 patient-years were 12.2 and 4.4 in add-on and 15.0 and 3.7 in switch patients. In patients with normal baseline values, alanine aminotransferase elevations >3×upper limit of normal were more frequent in add-on (14.3%) versus switch patients (5.4%). CONCLUSIONS Treat-to-target strategies could be successfully implemented with TCZ to achieve sustained remission, after which TCZ was stopped. Biologic-free remission was maintained for about 3 months, but most patients eventually flared. TCZ restart led to rapid improvement. TRIAL REGISTRATION NUMBER NCT00810199.

The Effect of Exchange Rate Volatility on International Trade: The Implication for Production Networks in East Asia

This paper is an empirical investigation of the relationship between exchange rate volatility and international trade, focusing on East Asia. It finds that intra-East Asian trade is discouraged by exchange rate volatility more seriously than trade in other regions because intermediate goods trade in production networks, which is quite sensitive to exchange rate volatility compared with other types of trade, occupies a significant fraction of trade. In addition, this negative effect of volatility is mainly induced by the unanticipated volatility and has an even greater impact than that of tariffs.