As Germany hosts sport's biggest competition, the eyes of the world are on football. Needless to say, a few of us will be taking time off to support our national teams, while others will be leaving work early with the say-so of their management. But the timing of the World Cup couldn't be worse.
Just a few weeks after the already infamous 'market correction' (which we analyse in our cover story) the tournament will be taking place during an important period for global markets. The European Central Bank is expected to announce decisions on interest rates, as is the Bank of England, and BP, for one, will be making a trading statement that could affect oil prices. The Tankan Survey is also due for release in early July, providing a barometer of Japanese business health from the Central Bank of Japan, and in the US, major employment data will be released with non-farm payroll employment figures.
It goes without saying that the financial community, as always, will have its hands full. But perhaps those of us in the structured products world can enjoy football and finance simultaneously. As Robert Benson writes, on page 34, there has been a deluge of football-linked structured products in recent months from the likes of SG, RBS, Nomura and Banco Sabadell. Some believe they are frivolous investments that prey on unsophisticated investors' fondness for football. But I believe there is a serious benefit to such products.
If the goal of the markets we write about is to filter innovation down from the institutional space to the mass retail market, what better way to handle it than with the help of the world's most popular sport? The marketing literature I've seen for such products makes it relatively easy for the average investor to understand what the payoffs can be. And any product that captures the investor's imagination, thereby helping to educate investors about derivatives-based investments, can only be a good thing.
Here's to hoping that the attempts to sell investments to the widest possible audience won't just be dependent on major sporting tournaments, but will become the priority of all structured products marketers worldwide.
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The week on Risk.net, July 7-13, 2018Receive this by email