Hi, Can anyone give explain the effect from seasonality on linker yields?An exampleLinker: issued on Jan 1 2012 with base index 100Maturity Jan 1 2014 Inflation forecast for Jan1 2014: 105 . This is the long run average and what "everybody" thinks will be the average inflation in the future*What's the yield on the linker?Now add a seasonality effect for Jan, eg. Jan CPI -0,5*What's the yield on the linker taking into assumption the seasonality effect?Thank you in advance

QuoteOriginally posted by: First thread on this forumHi, Your question may have been so poorly phrased, so ambiguous, so broad in scope or in such poor English that no one understands itYour answer could have been found by 10 minutes googling, but you were too lazyYour answer could have been found in the FAQs or Wiki or by searching the site, but you were too lazyYour question is clearly part of an assignment and you want others to do the work for youYou have asked versions of the same question multiple times on different Forums within the siteNo one knows the answer to your questionEveryone knows the answer to your question, but it is not even interesting enough to acknowledgeProbably guilty as charged on a couple of the bullets above. I will still give this a new shot and bump this. Would I be right to assume that a 2y linker which would yield eg 1,00% with no seasonality would yield 0,75% if the fixing month for the maturity and coupon would have a seasonality effect of -0,5% ? Ie 1,00% - (0,5%/2). And with the same reasoning a positive seasonlity of 0,4% would mean the fair value of the bond would be 1,20% . I'm thinking the cashflow from the first year will be affected by the seasonality but the second year the YoY yield will be affected no seasonality with seasonalityYear1 Jan2012-Jan2013 1,00% return 0,50% returnYear2 Jan2013-Jan2014 1,00% return 1,00% return And a 10y linker would look something like this no seasonality with seasonalityYear1 Jan2012-Jan2013 1,00% return 0,50% returnYear2 Jan2013-Jan2014 1,00% return 1,00% return Year3 Jan2014-Jan2015 1,00% return 1,00% returnYear4 Jan2015-Jan2016 1,00% return 1,00% returnetcso the sesonally adjusted (-0,5%for Jan) yield for the 10y bond would be 1,00%- (0,5%/10)= 0,95%If you have any reading recommendations for me I'm all ears. Where can I learn more about this??

PM me your email address and I will send you a piece that may help you understand.

That would be great. Pls forgive my mediocracy but I can't figure out how to send a PM. Pls advice

I am not sure how to explain it, but there should be a link in your upper left corner that takes you to where you deal with PMs.

click on the padlock symbol on the right hand side of the post

A couple of links I found which are slowly helping me understand this odd but interesting producthttp://www.nomuranow.com/research/globalresear ... =427029And more of a rough-and-dirty guidehttp://globalmarkets.db.com/new/img/Inflation_Doc.pdfhttp://www.qgroup.org.au/SFMW/Inflation_SFMW_J ... ebsite.pdf

There's a wealth of documentation out there on the subject... "Inflation-indexed Securities" by Deacon, Derry and Mirfendereski is a good reference book, IMHO.