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The July 2022 Sustainable Finance Monitor surveys developments in sustainable finance, including a nature positive economy, the transition away from coal and updates from GFANZ. Coauthored by Jonathan Fortun, the issue also covers policy and regulation, open consultations, new initiatives and tools, and a research roundup. A market section presents a third quarter snapshot of debt and equities.
Read the workThe July 2022 regulatory update brings together developments in cryptoasset capital treatment, climate risks and insurance supervision. Its overview highlights the Financial Stability Board’s communication to the G20, work on climate and bank capital, and assessment of insurance capital aggregation methods. Jonathan Fortun is listed among the contributors to this collective institutional update; the overview does not assign individual sections.
Read the workHeavy speculative positions against the yen created the risk of a sharp reversal in July 2022. The assessment argues that rising recession fears could reduce expected monetary tightening abroad and shift interest rate differentials in Japan’s favor. Markets had yet to price that change, leaving the currency vulnerable to disorderly appreciation if recession concerns intensified.
Read the workGlobal recession risks could reverse the yen’s weakness in the July 2022 assessment. Rising overseas yields had widened interest rate differentials while Bank of Japan yield curve control held domestic yields down. Falling global rates would reverse that pressure, supporting yen appreciation. This was a forecast based on the policy configuration at the time.
Read the workJune 2022 brought $4.0 billion in net portfolio outflows from emerging markets in Jonathan Fortun’s July tracker. Equity outflows of $10.5 billion outweighed debt inflows of $6.6 billion. Chinese equities nevertheless attracted $9.1 billion, highlighting a contrast between China’s inflows and the broader equity retreat.
Read the workRising sovereign spreads complicated the ECB’s planned monetary tightening in June 2022. Robin Brooks, Jonathan Fortun and Jonathan Pingle examine why a firm ceiling on peripheral borrowing spreads could imply unlimited bond purchases and conflict with constraints on monetary financing. They frame the challenge as containing debt market fragmentation without creating an open commitment to finance governments.
Read the workEmerging market portfolios recorded $4.9 billion in outflows in May 2022. Jonathan Fortun’s June tracker separates $3.4 billion withdrawn from equities and $1.5 billion from debt. China’s equities attracted $2.7 billion despite the broader retreat, highlighting the uneven geographic pattern behind the aggregate loss.
Read the workLow sovereign yields could conceal growing dependence on ECB bond purchases. Robin Brooks, Jonathan Fortun and Jonathan Pingle argue that yields held down during the pandemic were insufficient compensation for perceived risks, encouraging foreign investors to sell. Their June 2022 assessment highlights the tension between short term market stability and restoring private demand for peripheral government debt.
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