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Systematic traders and risk managers rely on tons of historical data to help predict probable gains and losses. So how will they predict the behaviour of the euro during its first few trading days, weeks, months? By David Shirreff.

Arguments over how to price a deal will never go away, even for frequent borrowers. Most have 15 or more investment banks chasing the mandates, offering the issuer all sorts of advice and inducements. A treasurer who chooses an aggressively priced deal might save his institution a few thousand dollars over 10 years and make himself look good to his bosses, but if it's too aggressive and investors don't buy it, could this harm his future issues? And if the deal is too generous, why should investors bother to buy paper issued later that might be more accurately priced?

I've just returned from Germany, visiting the great in government, bureaucracy, Bundesbank and the European Monetary Institute. I'm convinced the Bundesbank will raise interest rates by 25 basis points before the year-end and by around 200bp by the end of 1998.

Is the Asian currency crisis over?

For a while in the early 1990s, Vietnam looked set to make a late sprint to catch up with its much richer neighbours in south east Asia. A far-reaching programme of economic liberalization attracted a wave of foreign investment and unleashed strong economic growth. But in the past few years foreign interest has flagged and investment projects have frequently become bogged down in bureaucracy and corruption. With the latest industrial output figures showing the lowest growth rate in years, it is becoming clear that the country's underdeveloped financial markets are holding back the pace of economic growth.

Just as Wall Street bankers go back to work from their summer vacations, the latest financial thriller is hitting the bookstores.

Banca Popolare di Milano (BPM) has come up with an innovative bond linked to top names in the clothing, eyewear and accessories industries. The L20 billion ($11 million) self-led fashion-linked bond is based on an underlying basket of 12 international stocks ranging from Benetton, Bulgari and Gucci to Escada, Hermès, Luxottica and Louis Vuitton Moët Hennessy. The securities pay interest when the paper matures in two years' time: the holders will receive the appreciation between the value of the basket on payment date and its average price over the life of the bond.

Issuer: ITT Promedia

The legalistic stuff at the back of loan agreements is too dull for most bankers to bother about. But you need to know why it is there. By Christopher Stoakes.

For all the talk of designing exotic derivatives for hedge funds, the most useful service a bank can provide is often good old-fashioned credit. Even so hedge funds are prompting banks to reorganize since their demands straddle many departments. The funds' importance as customers is starting to outstrip that of institutional investors, and the banks are dancing to their tune. Andy Webb reports.

The first time I come to Hong Kong I check myself into the Mandarin and go out to meet this promising young shipowner called CH Tung, I sell him on a new way of financing his fleet, and this is the original Junk Bond.

Issuer: SBC Glacier Finance Series 1997-2