The CrossBorder Capital Blog

The US Treasury Yield Curve May Be Hugely Distorted And Falsely Signal A Deep Recession   Many are worried by the large inversion in the US Treasury yield curve. Specific yield curve spreads are not always good predictors of the business cycle. This time the hugely negative term premia and rising inflation trend further question their reliability. In short, fears of a big recession may be misplaced.     See our latest published research , Global View: The US Treasury Yield Curve May Be Hugely Distorted And Falsely Signal A Deep Recession – January 2023      

China and Emerging Markets Liquidity: Bullish EM   ·            EM liquidity will rise strongly through 2023, because lower US dollar and further policy ease from China   ·            Expect a progressive firming in World commodity markets through 2023         See our latest published research, China and Emerging Markets Latest GLI™ – January 2023  

Global Liquidity Update: When The Facts Change…   ·            Spurred by rising Global Liquidity, expect strong gains in several markets. But aggregate World equities and World sovereign bonds may be largely range-bound for the year   ·            China's re-opening may explain the spike in World GDP growth already registering on both our daily Nowcast model and parallel AI-based model of World economic activity       See our latest published research, Global Liquidity Latest – January 2023  

Global Liquidity and World Debt in 2023 – Hang on Tight, The Rollercoaster Returns   The expansions of debt and liquidity are closely linked. Liquidity drives markets, and liquidity is driven by the stock of debt, particularly when it is rising strongly and needs re-financing. Debt is likely to top US$315 trillion in 2023, excluding financials. More debt demands more liquidity, but the course of this relationship is never smooth. Differential movements can trigger financial crises. We expect Global Liquidity to rebound slightly to exceed US$174 trillion in 2023 as a stealth QE re-starts, pressured higher by ‘financial dominance’.         See our latest published research , Global View: Global Liquidity and World Debt in 2023 – Hang on Tight, The Rollercoaster Returns – January 2023    

Is US QT Already Dead? Understanding the Growing Pressures on the US Fed to ‘Ease’ Liquidity   The Fed is saying one thing (headline QT) and doing another (adding liquidity). The reality is that QE is easier to engage than disengage. The threshold for minimum US banks’ reserves is likely at least US$2.5 trillion and, at the latest QT pace, we could get very close to this danger point in a few months. We confidently expect liquidity to be higher by year-end. Watch bond market volatility for evidence of tensions, and the US dollar and the yield curve slope for signs liquidity is coming back.       See our latest published research , Global View: Is US QT Already Dead? Understanding the Growing Pressures on the US Fed to ‘Ease’ Liquidity – January 2023