The CrossBorder Capital Blog

China Throttles Down   China's large liquidity impetus from late-2022 has rapidly faded through March. We suspect further doses of stimulus will come, but the latest fall-off will feed through. As it does, markets will likely pull-back as cyclical and 'Risk-On' concerns build. This does not alter our longer-term view that the major stock and bond markets will be range bound in 2023. Within this framework, we continue to prefer cyclicals and still favour EM, on weakness.       See our latest published research , Global View: China Throttles Down – March 2023    

QE Is Coming Back   Despite the latest fears over stubborn US inflation, we argue that US QT (quantitative tightening) policies are effectively dead. This is for both financial stability and, longer-term, fiscal sustainability reasons. Therefore, even though US policy interest rates may be forced to stay higher for longer, Global Liquidity conditions should improve from 2023 onwards. QE will become a ‘permanent’ market feature, together with its many distortions.         See our latest published research , Global View: QE Is Coming Back – February 2023    

Global Liquidity – China’s Giant Step?   All-eyes are on the Fed, as gyrating US inflation measures muddle investors’ expectations over future interest rate policy. Again, we protest that the major market drivers are liquidity-based. Fed-watching is important, but it needs to be quickly complemented with China ‘PBoC-watching’. The People’s Bank matters hugely to the tempo of the World recession and earnings growth in 2023. In fact, the odds of World recession this could be largely dictated by how Chinese policy responds in the next few weeks?     See our latest published research , Global View: Global Liquidity – China’s Giant Step? – February 2023    

China and Emerging Market Liquidity Update, February 2023: China Kick Starts the World Economy   ·           EM liquidity will rise further through 2023 spurred by a lower US dollar and more policy ease from China. We are confident that there has been a deliberate policy change that is driving a faster trend in Chinese liquidity   ·            Expect a progressive cyclical economic rebound and a firming in World commodity markets through 2023       See our latest published research, China and Emerging Market Latest GLI™ – February 2023  

Global Liquidity, February 2023: Xi Zaps The Bear   ·          We expect a largely sideways-to-slightly positive outlook for World stock markets in 2023, and similar prospects for government fixed income ·          Our optimism has been overtaken by the sheer scale of liquidity injections. China’s People’s Bank (PBoC) injected a whopping RMB 3trillion (US$450 billion) across December and January 2023, or some 3½ times their total injections in the prior two years       See our latest published research, Global Liquidity Latest – February 2023  

Expect The Unexpected! The China Shock   The World economy appears to be surprisingly robust, despite the unanimous prediction of upcoming ‘recession’ among economists. What’s more, most financial markets, Treasuries aside, seem to be on-board with the idea of economic recovery. We argue here that the markets are right, but two things have distorted opinion: (1) underestimating China’s monetary easing and (2) ignoring the structural shortage of collateral, which has biased the yield curve.       See our latest published research , Global View: Expect The Unexpected! The China Shock – February 2023