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The five-, 10-, and 20-year yields of Japanese government bonds (JGBs) co-move with the six- and 12-month basis swap rates under the quantitative and qualitative easing policy regime introduced by the Bank of Japan (BOJ). The 10- and 20-year JGB yields are in a one-to-one relationship with the six- and 12-month basis swap rates. A cheaper yen gives foreign investors strong incentives to buy 10- and 20-year JGBs under the quantitative and qualitative easing policy regime. A cheaper yen also gives foreign investors some incentives to buy five-year JGBs under the same regime. However, JGB yield does not co-move with basis swap rate under the negative interest rate policy regime. After the BOJ introduced the negative interest rate policy, the trend observed under the quantitative and qualitative easing policy regime changed.

This study examines the response of Australian interest rate swap spreads to the arrival of macroeconomic news information during the economic expansion and contraction periods. We find that the impact of news announcements on swap spread change differs and largely depends on the state of the economy. The unexpected inflation rate is the only news released that has significant impact on swap spreads across all maturities during contractions and remains the important news announcement throughout the business cycles, while the unanticipated unemployment rate tends to be more relevant to 10-year swap and the unanticipated change in money supply tends to be more relevant to 4- and 7-year swaps during expansions. We also find shocks from these news surprises appear to have significant impact on the conditional volatility of the swap spread change during both economic phases. The macroeconomic shocks in general are negatively related to the conditional volatility of the swap spread change, suggesting that the newsworthy announcements tend to reduce uncertainty on the news announcement days in the swap market during expansion and contraction periods.

The dynamics between five-year US Treasury bonds and interest rate swaps are examined using bivariate threshold autoregressive (BTAR) models to determine the drivers of spread changes and the nature of the lead–lag relation between the two instruments. This model is able to identify the economic – or threshold – value that market participants consider significant before realigning their portfolios. Specifically, three different regimes are identified: when the swap spread in the previous week is either high or low, the Treasury bond market leads the swap market. However, when the swap spread is low, none of the markets leads each other. Thus, yield movements are shown to be governed by the direction and magnitude of the change in the swap spread, which in turn provides an economic insight into the rebalancing between swap and bond portfolios.

A cheaper yen gives foreign investors strong incentives to buy Japanese Government Bonds (JGBs) of 5 and 10 years under the comprehensive easing policy regime. The purchase of JGBs by foreign investors using a cheaper yen funded on a negative basis in the long-term basis swap market contributes to the declining yield of JGBs under the comprehensive easing policy regime. When the Bank of Japan introduced a quantitative and qualitative easing policy, and then a negative interest rate policy, the trend observed under the comprehensive easing policy changed. This was because long-term basis swap rate tended not to decline under the quantitative and qualitative easing policy and negative interest rate policy regimes in comparison with under the comprehensive easing policy regime.

This case study examines the controversial practice by the Commonwealth of Australia during the period 1988–2002 of using currency swaps as part of its debt management strategy. Although the strategy provided a positive return overall, the impact of currency swap usage created significant year-by-year variations in returns, which posed a risk to debt interest and financing requirements. This suggests that the risk limits imposed on this strategy were both inappropriate and insufficient. Nonetheless, these findings provide insights into how such a policy could best be implemented given recent proposals (OECD, 2007) for derivatives use by public debt managers.

Swapping as part of collaborative consumption is not a new phenomenon per se, but might gain increased importance after the recent COVID-19 pandemic that has seen a shift in consumer attitudes, consumption, and disposal behaviour. Swapping as one form of collaborative consumption, however, is currently neither mainstream nor target towards the general population, but rather a niche population (secondhand consumers). With sustainable issues (environmental, economic, and social) remaining a key concern, and consumers seeking to dispose of their garments, swapping might become an increasingly attractive alternative, yet currently it may not be communicated as such. This chapter explores the potential of creative marketing communications to enhance the uptake of swapping in order to overcome a key challenge in the industry: fashion waste.