Fixed Income, Currencies, and Commodities (2024)

FAQs

Fixed Income, Currencies, and Commodities? ›

Fixed income, currency and commodities teams transact in a variety of assets, including interest rate products (such as government bonds, treasury bills and other highly liquid instruments), credit products, mortgages, currencies and commodities.

The Fixed Income and Currencies Department of investment banks, usually referred to as FIC, brings together the interest rate and currency activities of the market divisions.

Securities transactions processed by the FICC's GDS include Treasury bills, bonds, notes, zero-coupon securities, government agency securities, and inflation-indexed securities.

A few differences in Fixed Income interviews include: More Focus on “The Macro” – Since FICC includes products such as FX, commodities, and government bonds, you'll get more questions about GDP, interest rates, yield curves, inflation, monetary policy, exchange rates, and so on.

Fixed income derivatives include interest rate derivatives and credit derivatives. Often inflation derivatives are also included into this definition. There is a wide range of fixed income derivative products: options, swaps, futures contracts as well as forward contracts.

Some examples of countries with fixed currency regimes include: Hong Kong: The Hong Kong dollar is pegged to the U.S. dollar at a rate of approximately 7.75 Hong Kong dollars to 1 U.S. dollar.

Fixed exchange rates are based on a specific target, typically pegged to another country's currency. Managed floating exchange rates allow floating of the rate based on supply and demand but also allow intervention to avoid significant fluctuations in value.

Fixed income trading involves the buying and selling of securities including government and corporate bonds. Learn the basics of those securities and how they are impacted by government and fiscal policy and other macroeconomic indicators.

Fixed Income includes debt securities such as bonds. Commodities are physical—usually relatively raw—goods that come from the earth such as oil, cotton, gold and soybeans. Alternatives include nontraditional—often esoteric—investments related to volatility, credit spreads, inflation and more.

Fixed-income markets include not only publicly traded securities, such as commercial paper, notes, and bonds, but also non-publicly traded loans. Although they usually attract less attention than equity markets, fixed-income markets are more than three times the size of global equity markets.

What product is fixed income? ›

Fixed income refers to those types of investment securities that pay investors fixed interest or dividend payments until they mature. At maturity, investors are repaid the principal amount that they originally invested. Government and corporate bonds are the most common types of fixed-income products.

US Treasury notes and bonds are considered the safest fixed-income investments because they are backed by the full faith and credit of the US government, which has never defaulted on its obligations.

Overall, fixed income ETFs provide investors with the opportunity to access the bond market with the convenience and liquidity of trading on stock exchanges.

Fixed income, currency and commodities teams transact in a variety of assets, including interest rate products (such as government bonds, treasury bills and other highly liquid instruments), credit products, mortgages, currencies and commodities.

India takes the top spot. The world's most populous country owed $38.3bn to the WB at the end of 2022, down by almost $1.5bn from a year earlier. India's outstanding balance is almost double that of the next biggest debtor, Indonesia, with $20.6bn.

Fixed income derivatives may be traded on exchanges, where the underlying bond and terms of the contract are standardized. Unlike a forward contract that trades over-the-counter (OTC), a standardized fixed income derivative is an exchange-traded futures contract.

Fixed income refers to assets and securities that pay a set level of income to investors, typically in the form of fixed interest or dividends. Government and corporate bonds are the most common types of fixed-income products.

The Emerging Markets Debt Hard Currency Strategy is a value-oriented fixed income strategy that seeks high total return from income and price appreciation by investing in a range of Sovereign, Quasi-Sovereign and Corporate Debt securities in Emerging Markets.

The U.S. dollar and other major currencies are floating currencies—their values change according to how the currency trades on forex markets.

Fixed-income provides stability and regular cash flow, while stock investments offer growth over time, albeit at the expense of volatility. So a good investor can design a portfolio with both elements to meet their short- and long-term needs.