The CrossBorder Capital Blog

The Bank of Japan Puzzle   Weekly balance sheet data from the World’s major Central Banks confirm stability in aggregate liquidity growth (latest 19.3% 3m ann.). Data for the G4 (exc. China) record a similar 18.7%. Diving deeper into the data shows that the US Fed and ECB are holding steady, while the Bank of Japan and Bank of England continue to curtail liquidity growth. PBoC liquidity injections are oscillating, in rhythm with the Renminbi/US dollar exchange rate.       Please find either a link to our website, or an email attachment.  For further information, or to change user options, please contact us at crossbordercapital@liquidity.com              —————————————————————————————————...

Latest PBoC Data Evidence Looser Monetary Stance   Weekly balance sheet data from the World’s major Central Banks show little change in aggregate liquidity growth since the beginning of the year (latest 20.5% 3m ann.). Data for the G4 (exc. China) record a similar 19.5%. This reflects the stability in official monetary policy, echoed this week by the ECB and Bank of Japan at the first monetary policy meetings of 2021. Yet, there is a clear divergence in trends.       See our latest published research, Weekly Global Liquidity Update 22 January 2021   For further information, or to change user options, please contact us at crossbordercapital@liquidity.com              ———————————————————————————————...

Chinese Liquidity – Does 2021 Look Like 1984?   China provided nearly one-third of the US$23 trillion surge in Global Liquidity in 2020, gunning her total lending up by an impressive 13%. Too many pundits fear that 2021 will now see a damaging policy tightening. We doubt it. With the US dollar skidding, Asian and Chinese policy-makers’ quest for export competitiveness will keep regional monetary policy loose. It may even get looser. China’s economy is a model of debt accumulation, but this fact tells us more about the long-term risks than reverse likely increases in stock and commodity prices in 2021.     See our latest published research, Global View -  – January 2021   For further information, or to change user options, please contact us at crossbordercapital@liquidity.com          —————————————...

A Fork in the Road: PBoC Trending Higher; ECB, BoJ and BoE Drifting Lower, and Fed on the Cusp   Latest weekly balance sheet data from the World’s major Central Banks show that aggregate liquidity growth has slipped since the start of 2021 (latest 19.7% 3m ann.) Liquidity growth, in aggregate, has been largely range-bound since August 2020, but below the surface there has been a change in direction. While the ECB, Bank of Japan and Bank of England “slowed” through the period, the US Fed and the People’s Bank of China had been moving in the opposite direction, until now. The Fed has marked the New Year by reining in liquidity growth, but the PBoC is stepping up the pace. This has coincided with Renminbi strength versus the US dollar: up by some 3.5% in the last three months and around 7% through 2020.       See our latest published research, Weekly Global Liquidity Update 15 January 2021   For further information...

Inside The P/E Multiple – Are Stocks Really In A Bubble?   Years ago (in 1990 at Salomon Brothers) we first published a research piece entitled ‘Inside The P/E Multiple’. The methodology proved controversial. It was submitted to the Financial Analysts Journal (FAJ), which quickly rejected the paper and its conclusion that equities were then undervalued with the damming comment ‘fanciful’. Many may still disagree with the concept of macro-valuation shifts, but we think the analysis is worth re-visiting, largely because it can help explain today’s markets.     See our latest published research, Global View - Inside The P/E Multiple – Are Stocks Really In A Bubble? – January 2021   For further information, or to change user options, please contact us at crossbordercapital@liquidity.com          —————————...

  Emerging Markets Liquidity Update: China Will Ease More in 2021   The doggedly tight policies of the People’s Bank of China (PBoC) appear to be changing towards ease.   Asian policy-makers, including China and probably Japan, are likely targeting stable currencies. Hence, they must absorb and monetize any capital inflows.       See our latest published research, Emerging Markets Latest GLI™ – January 2021   For further information, or to change user options, please contact us at crossbordercapital@liquidity.com            —————————————————————————————————————————————————...

Global Liquidity Latest: Bubble Economies, Not Bubble Markets?     Global Liquidity looks set to rise by a further US$25 trillion in 2021 (or 15%), with Central Banks likely adding an extra US$3½ trillion of QE.   The V-shaped recovery is plainly obvious, but renewed Chinese monetary ease will drive World economic growth far higher in 2021 than many currently expect.       See our latest published research, Global Liquidity Latest –   January 2021   For further information, or to change user options, please contact us at crossbordercapital@liquidity.com              ———————————————————————————————————————————...

Stable Economies, and in China's Case a strong Renminbi, Allow Central Bankers Some Slack   Latest weekly balance sheet data from the World's major Central Banks show aggregate liquidity growth slipping lower in the last two weeks. Aggregate balance sheet growth has fallen to 17.8% (3m ann.). Liquidity growth has been largely range-bound since August, although recent weeks show a clear downtrend. This has coincided with general economic stability, despite ongoing lockdowns.       See our latest published research, Weekly Global Liquidity Update 8 January 2021   For further information, or to change user options, please contact us at crossbordercapital@liquidity.com              ————————————————————————————————————————————————————————— 19/21 Catherine Place, London SW1E 6DX Tel: 0203 954 3430         @crossbordercap   CrossBorder ...

Global Liquidity in 2021: Another Story   Global Liquidity will break records in 2021, fuelled by further Central Bank QE as policy-makers accommodate continued large fiscal programmes. Yet, more-and-more liquidity is heading into real economies, and strong economies rarely have strong financial markets. This is both the warning and the opportunity in 2021.     See our latest published research, Global View - Global Liquidity in 2021: Another Story – January 2021   For further information, or to change user options, please contact us at crossbordercapital@liquidity.com          ———————————————————————————————————————————————...