CAREERS ADVICE: How to secure a job at an Investment Bank

1. Understand the structure of an Investment Bank

Broadly speaking, an investment bank is divided into the front, middle and back office functional areas. There are many other areas, such as marketing and legal departments, but for the purpose of this article, we shall focus on the aforementioned areas.

MARKET UPDATE: Risk Aversion Takes Hold of Markets

 Risk aversion has come back with a vengeance over the last 10 days driven by a host of concerns that continue to damage market sentiment
 USD and JPY remain the best currency plays against the background of rising risk aversion and both currencies look well supported
 Market concerns have not completely abated, although fears plaguing markets have receded, particularly on the US political front, with Obama’s State of the Union address, Geithner’s testimony on AIG and Bernanke’s reappointment all passing without too much incident

VIDEO: Options Trading: Delta Hedging & Gamma Scalping...

In this video, Joe Troccolo discusses some of the fundamentals of Options trading, including a description of Gamma Scalping; the dynamic management of an options trader's Delta position. For more on Joe Troccolo, click on the link in our post titled, "Market Wizards: About Joe Troccolo"

Market Wizards: About Joe Troccolo

To learn more about Joe Troccolo, click here

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SPREADSHEET TIPS & TRICKS: Text to Columns…

THE PROBLEM: You are given a list of email addresses and you wish to extract the First Name, Surname and Company Name from the list. The majority of the emails come in the format firstname.surname@company.com. Separating the information manually will be time consuming; you need a quick solution.
THE SOLUTION: Use the Text to Columns function as per the screenshots below…

MARKET UPDATE: Optimism Dissipates for Global Recovery

 Optimism about strong recovery led by China – recall the fact that disappointment from the surprisingly weak US non-farm payrolls report in December was outweighed by strong Chinese trade data – has dissipated
 Instead of rejoicing at China’s robust GDP report last week, which revealed a 10.7% rise in the fourth quarter of 2009, worries over whether China would have to move more aggressively to tighten monetary policy dominated investor’s thoughts
 Further to this, US President Obama’s plan to limit the size and trading activities of financial institutions dealt another blow to financial stocks
 Meanwhile, rumblings about Greece continue to weigh on markets and Greek debt spreads continued to widen even as global bond markets rallied
 Obama’s announcement helped EUR/USD to avoid a break below 1.40, as there was a pullback in USD
 The AUD was also hit by news that Australia’s Henry Tax Review would look to tax miners in the country. As a result AUD/USD dropped below 0.90 though this level is likely to provide good buying levels for those wanted to take medium term AUD long positions
 The other G3 central bank to meet this week is the Bank of Japan but unless the Bank is seen to be serious about fighting deflation, USD/JPY may remain under downward pressure. USD/JPY, however, will find strong support around 88.84

These are the salient points kindly contributed by Mitul Kotecha, MD & Head of Global Currency Strategy at Calyon. To view the full discussion, please click here to visit the original post on his website The Econometer

SPREADHSEET SHORTCUTS: Select an entire row or column using just the keyboard...

Shift & Space Bar; to select an entire row, whilst in Excel, press shift first, and while depressed, press the space bar. This will highlight the whole row for the current cursor location. If a few cells are highlighted vertically before the keys are depressed, then all the rows highlighted in the selected range will be highlighted.

SPREADHSEET TIPS & TRICKS: Left & Right...

The left and right functions allow you to extract a specified number of characters from a data field in Excel. For example, the below screenshot shows a time series data dump of currency rates, dates and times from Reuters. The date field has come in the format DD/MM/YY HH:MM:SS. You may wish to separate the date from the time in this field. One way to do so is to use the Left and Right Functions, as per the screenshots below…

SPREADHSEET TIPS & TRICKS: Upper, Lower, Proper...

Here are some useful functions to help tidy a spreadsheet that contains non-numeric data. If, for example, you are given a list of names and addresses, in all lower or all uppercase, but you really need them to be in the proper format, with the first character in uppercase only, then the “proper” function can be used. Screenshot A shows an example. It’s a quick and easy way to convert a list of incorrectly formatted non-numeric data that would otherwise be timely and manual process...

MARKET UPDATE: The Euro comes under pressure

 The EUR continues to struggle both due to the direct and indirect impact of Greece’s fiscal problems
 Indirectly, the EUR dropped sharply following the release of the below consensus German ZEW survey
 Directly, concerns about the seriousness and/or ability of Greece to solve its problems are also weighing on the currency
 Officials at the Ecofin meeting of European finance ministers noted that Greece would not receive help from its neighbours but said its problems are a concern for all of the Eurozone
 The strength of the EUR was also discussed at the Ecofin meeting, with the EU’s Juncker stating that it should better represent European interests
 EUR/USD looks especially vulnerable below its 200-day moving average around 1.4298, the first time it has traded below the 200 day moving average since May 2009

These are the salient points kindly contributed by Mitul Kotecha, MD & Head of Global Currency Strategy at Calyon. To view the full discussion, please click here to visit the original post on his website The Econometer

MARKET UPDATE: Q4 earnings and Chinese data

 On balance the overall tone since the start of the year has been just about positive, with firmer economic data, most notably in China outweighing sovereign debt concerns in Greece and elsewhere
 With the markets gyrating between a “Risk on” and “Risk off” tone from the turn of the year, “Risk off” may be the tone at the start of this week, as US equities ended the week on a negative note ahead of the Martin Luther King holidays
 Bank earnings will be a key focus, with Citigroup, Morgan Stanley, BoA, Wells Fargo and Goldman Sachs set to report this week
 Given the growing influence of Chinese data on markets the monthly data pack from China will capture more attention than usual on Thursday
 Chinese GDP data is likely to reveal an acceleration in growth in Q4 YoY to above 10%
 In the Eurozone the main event is the German ZEW survey tomorrow, which is likely to show further signs of flagging, due to Greek concerns
 UK data kicked off on a positive note this week, with house prices rising 0.4% MoM in January and 4.1% YoY according to UK property website Rightmove, the biggest annual gain in over a year
 The data as well as expectations that Kraft will raise its bid for Cadbury will likely help GBP in addition to other GBP positive M&A news

These are the salient points kindly contributed by Mitul Kotecha, MD & Head of Global Currency Strategy at Calyon. To view the full discussion, please click here to visit the original post on his website The Econometer

SPREADSHEET TIPS & TRICKS: Consolidating Data Lists...

Do you work in sales & trading? Have you ever had the head of your desk approach you and say, "Could you just run me a quick report to find out how many clients have dealt with us during 2009?"... Have you said "Yes" but thought to yourself, "Do I look like a spreadsheet jockey? Why is he getting me to do that? And more importantly; How on earth do I do that...?"

First, the excel tip, then the career advice...

SPREADSHEET TIPS & TRICKS: The F5 Key (Part 2 of 2)

Hit the F5 Key on your Keyboard within an Excel Spreadsheet and click the Special... button to show the tool in the below screenshots.

The Special... key is a powerful search and identification tool within Excel. To set the scene, when building a financial model, one must know which cells contain formulas and which cells contain hard coded data (numbers punched in manually). The creator of the model will not want new users to overtype the cells that contain formulas with hard coded numbers, otherwise formulas will be lost. To avoid this, the financial modeller will use a colour coding system, whereby all "entry" cells are filled in yellow and have blue coloured text, and all cells that contain formulas, and therefore are not to be overtyped, are left with a black font and clear cell colouring.

The screenshot shows an example of a completed DCF model. However, there lies one problem for the creator of this model, in that he or she cannot quickly remember which cells contain formulas and which are hard coded.

SPREADSHEET TIPS & TRICKS: The F5 Key (Part 1 of 2)

What does the F5 key do?

The F5 key brings up the Go To... dialogue box. This is useful for financial modellers who like to use named cells or cell ranges. It is a quick way to bring up a list of all named cells or cell ranges within Excel files. Equally if one is auditing another's spreadsheet and would like to check what named cells or cell ranges the original modeller has used, if any, then the F5 key offers a quick way to do so.

In the pictoral example, below, the modeller has many cell ranges and the F5 key is an easy way to view which names have been allocated to which cells or cell ranges. If the modeller has forgotten which cells each range refers to, they can simply double click an item on the list and Excel will highlight the relevant cell on the relevant tab within the Excel file.

MARKET UPDATE: A Greek Tradgedy

• Greece announces a three-year plan to reduce rising fiscal deficit. However this failed to convince the markets, as Greece’s 5-year CDS widened to 333bps whilst 10-year sovereign spreads widened further.
• The plan proposes to reduce the budget deficit from 12.7% to 2.8% of GDP by the end of 2012, which many view as unrealistic.
• Greece’s deficit is planned to be cut by 4% this year alone; a tall order given the likelihood that the economy will contract this year.

MARKET UPDATE: G3 Economies Show Modest Growth

 A few themes are already becoming evident into 2010. Firstly, the dominance of China and any news on the Chinese economy is becoming increasingly apparent, as reflected in the market reaction to trade data and hike in reserve requirements this week (see our post, China Tightens Monetary Policy)
 The second theme that is developing this year is the “risk on” environment for asset markets
 Another theme is the problems and concerns about sovereign debt and ratings, which will likely intensify further
 A final theme that could be added is the underperformance of the Eurozone economy, a theme that is likely to become more apparent as the year progresses
 Not to forget the US, their economy is showing more signs of life but even so, the improvements are “modest” as reflected in the Fed’s Beige Book

To view the full discussion, please click here to visit the original post on The Econometer website

MARKET UPDATE: China Tightens Monetary Policy

Before we discuss the changes in China’s Monetary policy, summarised in the latest blog by Mitul Kotecha, Head of Global Currency Strategy at Calyon, we thought it valuable to outline the differences in the way the People’s Bank of China (PBoC) operate monetary policy relative to major central banks in the West...

Demystifying The Global Equity Markets; An Institutional & Technology Driven Market

For those of us on the outside, the Global Equity Markets can appear to be a myriad of confusing acronyms and technological jargon. Part of the reason is that it is one of the most technologically advanced asset classes, which has given rise to terminology and acronyms that could be considered baffling to say the least to the uninitiated; from "Dark Pool Crossing" to "DMA" and "ECNs". We, at the Banker's Blog, have attempted to demystify the Global Equity Markets, and provide an overview to the market, products, main players and technology involved.

CLIENT ENTERTAINMENT; Milk & Honey, Private Members Club, London & New York

The Bankers Blog Editor, a banker by day, was entertained on Friday evening at Milk & Honey, a private member’s club with a presence in Manhattan's Lower East Side, New York, and on Poland Street, in Soho, London. The London bar is discretely located and you need to know what you are looking for in order to find it, as it resides behind a locked, unmarked black door.

Having opened in 2002, Milk & Honey remains, in their own words, “dedicated to bringing unrivalled drinks quality and service to a discerning crowd of grown-ups.” It houses bars on three floors; offering a range of intimate booths, counter drinking, lounge drinking and eating options.

MARKET INSIGHT: Currency Markets; High yield / commodity currencies take the lead

The following is a summary of a recent article written by Hong Kong based Mitul Kotecha, Managing Director and Head of Global Currency Strategy at Calyon. Mitul has kindly agreed to share his expert currency market views with The Banker's Blog.

The article can be viewed in full on Mitul's website, The Econometer, by clicking here.

• Even though equity markets have fallen in recent sessions, the trading community continue to show an appetite to take risk onto their books
• As a result, high yielding and commodity currencies have emerged as winners in recent trading sessions, particularly AUD, CAD, NZD and NOK. Emerging market currencies have also risen
• Mitul backs a continuation of this trend and is in favour of backing long positions in the above currencies, particularly against JPY, which he expects to come under pressure as the year progresses