ACTUAL DEVELOPMENT OF FINANCIAL MARKETS

Assoc. Prof. Dr. Petr Budinský

University of Finance and Administration

Prague, Czech Republic

petr.budinsky@vsfs.cz

www.vsfs.cz

FINANCIAL MARKETS

• Bonds

• Stocks

• Commodities

• Forex

• Derivatives

BONDS

• Yields based on interest rates

• The higher the yields the lower the prices

• Very low yields on European bonds

• High yields on bonds – Russia and Greece

10Y GB US

10Y GB GER

10Y GB CZ

10Y GB FR

10Y GB IT

10Y GB SP

10Y GB GR

10Y GB RU

10Y GB MEX

STOCKS

• High volatility since 2008

• Impact of Quantitative Easing

• Difference between US and Europe

• The situation in Russia and Greece

DJIA

S&P500

EuroSTOXX 50

NIKKEI

COMMODITIES

• Energy, Precious metals, Food

• Impact of Financial crisis in 2008

• Very high volatility a associated risks

• Consequences for the economic situation

Brent Crude Oil 1Y

Brent Crude Oil

GOLD

GOLD 1Y

WHEAT

WHEAT 1Y

FOREX

• The weak currency as a goal

• US recovery and its impact to USD

• QE in Europe and its impact to EUR

• Lessons from China, Great Britain and Switzerland

USD/EUR

CZK/EUR

CZK/USD

MXN/USD

MXN/CZK

CHF/EUR

RUB/EUR

RUB/USD

DERIVATIVES

• Futures, Options, Swaps and CDS

• Hedging versus Speculation

• Role of derivatives in financial crisis in 2008

• CDS as risk measure

CDS 10Y US

CDS 10Y GER

CDS 10Y CZ

CDS 10Y FR

CDS 10Y IT

CDS 10Y SP

CDS 10Y GR

CDS 10Y RU

CDS 10Y MEX