Posts

Emerging Market Liquidity: Leading The Way…Downwards?

Emerging Market Liquidity: Leading The Way…Downwards? ·                 Robust EM capital inflows suggest a potentially more stable path for EM currencies over the next 12 months   ·                 The recent sizeable step-up in Chinese liquidity injections via MTLs is unlikely to be a major policy reversal, but it is supportive and may still prove important     See our latest published research, Emerging Markets Latest GLI™ – November 2021  

Global Liquidity Update: Slump-flation in 2022?

Global Liquidity Update: Slump-flation in 2022?   ·                 Global Liquidity has been lately propped up by unexpected largesse from the US Fed, yet US money market flows are themselves now starting to inflect downwards ·                 European and Asian economies are sliding lower, notably China, and with no sign that the People’s Bank is prepared to offer additional liquidity support         See our latest published research, Global Liquidity Latest – November 2021  

How to Spot A Crisis?

From Tamper to Taper: Danger Signs To Watch? Or What Triggers Financial Crises?   World stock markets have enjoyed stellar gains since last year’s COVID sell-off. However, they are lately struggling under pressure from accelerating inflation, and both threats from and actual tightening by Central Banks. Could things get worse? This report looks back through five decades of history to better understand the threats to the market. Financial crises are unambiguously scrambles for liquidity. Spoiler alert: Global Liquidity is already turning lower.       See our latest published research, Global View - From Tamper to Taper: Danger Signs To Watch? Or What Triggers Financial Crises? - November 2021    

Bonds: A Contrarian Bet?

Fixed Income Investors Believe Fed Policy-Makers Will Make A Mistake – Could Long Bonds Be A Contrarian Bet For 2022?     Government bond markets may once again be a step-ahead of other assets classes? We are concerned by the prospect of monetary tightening because of the dominant role of Central Banks in providing liquidity. Soaring term structure convexity and a flattening at the back-end of the US Treasury curve point towards ‘stagflation’ and rising credit risks for 2022. In this light, the out-of-favour 10-year US Treasury note may be an interesting investment?       See our latest published research, Global View - Fixed Income Investors Believe Fed Policy-Makers Will Make A Mistake – Could Long Bonds Be A Contrarian Bet For 2022? - October 2021    

Prospects For Global Liquidity in 2022

Prospects For Global Liquidity in 2022   Global Liquidity is slated, next year, to see its smallest annual increase since 2018, pulled back by the tapering of QE and increases in Central Bank policy rates. This is likely to prove a major headwind for risk asset markets. It also poses bigger risks to funding conditions that could easily tip markets into a more serious sell-off. Three major uncertainties influence our projections: the likely continuing Chinese credit squeeze; the unanticipated Eurozone inflation response and the legacy effect of regulatory constraints on US liquidity.       See our latest published research, Global View - Prospects For Global Liquidity in 2022 - October 2021    

Global Liquidity Latest: A Short Jerk From The IMF?

Global Liquidity Latest: A Short Jerk From The IMF?   ·                 The scale of decline in Global Liquidity is not necessarily bearish, as yet, but it does not look especially bullish for asset markets in 2022.   ·                 Tighter Chinese liquidity may well explain the intensity of the latest World economic slowdown. This policy-change represents a significant switch away from ‘growth at all costs’ to ‘stability’, notably for the Yuan.       See our latest published research, Global Liquidity Latest – October 2021  

Is A Bear Market Coming?

A Bear Growls! Where Are We In The Investment Cycle?   Global Liquidity matters hugely to asset allocation. The peak and fall in liquidity, spurred by Central Bank tapering and rate hikes, is a major head-wind for 2022. The investment cycle is currently in the ‘Speculation’ phase, with ‘Turbulence’ next up. Here, volatility-based investment strategies and more cash are favoured.       See our latest published research, Global View - A Bear Growls! Where Are We In The Investment Cycle? - October 2021