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The Currency Composition of Foreign Exchange Reserves (BIS, 38 page read) The BIS uses new data across 60 economies and finds that the choice of currency in FX reserves is affected by the correlation between the local currency and G3 FX and also the invoice currency in trade.
“Don’t know” Tells: Calculating Non-Response Bias in Firms’ Inflation Expectations Using Machine Learning Techniques (Bank of Japan, 24 page read) The Bank of Japan tried to determine whether firms that say they “don’t know” in the Tankan survey’s questions on inflation expectations, actually do “know” something. They use some clever machine learning techniques and find that some do “know”, but it doesn’t impact the overall results of the Tankan survey.
The Cost of Clearing Fragmentation (BIS, 47 page read) The inability to net trades across exchanges and clearing houses can distort market prices. This study finds that US dollar swap contracts do trade with price differences across US and UK exchanges. This suggests there is a collateral cost issue.