Trading Inflation

Trading Inflation takes a practical, hands-on approach to the subject, with numerous examples to go beyond the 'what' and focus on the 'how' for trading and investing in inflation-indexed products. Written in an accessible style by experienced practitioners, this book provides a consistent and comprehensive framework for understanding and applying the building blocks of this important asset class. Where appropriate, industry-standard Bloomberg-based screenshots are included to show the reader the use of these practical tools. Numerous worked examples are complemented with a set of problems at the end of each chapter with the aim of enhancing understanding. Many of the examples are targeted at using one or both of MS Excel and Bloomberg Professional. Section I covers markets and products and consists of succinct chapters, each a standalone module, covering the essential building blocks in this market. The design of the book allows the reader to pick and choose what are most appropriate modules for their particular uses. Section II focuses on trading and hedging strategies, illustrating various risk measures, models, market peculiarities such as seasonality and relative value analysis. Chapters are included on strategies to express various market views and also how to hedge flows as a market maker. Section III is dedicated to end users of inflation-indexed securities, i.e. the issuers and investors. These in-depth chapters cover detailed examples and case-studies applied to issuer and investor solutions, including the increasingly important area of liability driven investments or LDI.