The CrossBorder Capital Blog

  Why Are World Investors So Downbeat?   Global investors seem too downbeat in absolute terms, and certainly relative to expanding liquidity conditions and improving economic expectations. They hold moderate levels of equities and high quantities of ‘safe’ assets. Historically, these points usually signal upcoming periods of high equity returns.  

The US Dollar in 2020: QE4 Causes A Nasty Sucking Sound?   Many indicators are pointing towards ‘risk on’, such as cautious investor positioning data and rising Central Bank liquidity injections. Signs of a US dollar peak would surely confirm this shift, because the US unit has attracted substantial safe-haven flows since 2015? Not only do latest US capital flow data evidence a peak, but, simultaneously, so does the other successful predictor of the US dollar, the quality mix of liquidity. Helped by the Fed’s new QE4 policy, these are peaking after several years of strength. Could 2020 be the year when the US dollar finally stalls?    

Putting Everything On Red? Why This QE4 Really Matters For All Investors   Some policy-makers are downplaying their latest QE4 activities. We think these activities are significant and probably will add around one-fifth to the pool of Central Bank money. During each of the previous QE phases, US bond term premia rose by an average of 135bp, dragging Treasury yields higher. In both QE1 and QE2 the US dollar fell, but in QE3 it strengthened slightly and in all QE phases equity prices rose. We view this renewed QE4 as a ‘risk-on’ period. This phase may signal the ultimate end-game of the 10-year bull market, but, with so much cash already sitting on the side-lines, this new stimulus likely still has some way to go.