The CrossBorder Capital Blog

The Sell-Off in Treasuries Is Not Good News for Global Liquidity   We argue here that structural supply and demand forces are pushing US Treasury yields higher via rising term premia. The US Fed is almost powerless to offset this. The resulting impairment to the value of the pool of collateral that backs credit markets will hit Global Liquidity. Caution: Asset prices could suffer a negative shock.       See our latest published research, Global View - The Sell-Off in Treasuries Is Not Good News for Global Liquidity – 26 th September 2023  

Global Liquidity conditions falter … again   Global Liquidity conditions falter … again. The root of the problem is weaker shadow monetary base growth. The Fed and Bank of Japan are behind this latest development. This is worrying. Tight liquidity conditions put pressure on financial assets. Already, bond market volatility, as measured by the MOVE, has ticked higher. A rise in the MOVE negatively affects the collateral multiplier, which in turn affects global liquidity. This is borne out by the charts below. Caution! Near-term developments are not good but we still remain upbeat longer-term and continue to believe the Global Liquidity cycle bottomed last October       See our latest published research, Weekly Global Liquidity Update 26 th September 2023  

  How China Sets US Interest Rates   China’s large economic size and her huge past commitment to the US dollar gives her huge sway over US interest rates. With the US Treasury set to boost coupon debt supply, the US Fed continuing its ‘QT’ and China’s appetite for holding US debt fading, US and World interest rates face severe crosscurrents, even a sea change!     See our latest published research, Global View - How China Sets US Interest Rates - 13 th September 2023  

Global Liquidity September Update: The 'Everything' Bottom   Everything is bottoming! Global Liquidity, stock markets, bond term premia, the World economy and even inflation pressures. We remain upbeat, but must acknowledge that the big gains in risk assets are likely over for a while…       See our latest published research, Global Liquidity Latest – September 2023   Please find either a link to our website, or an email attachment.  For further information, or to change user options, please contact us at research@crossbordercapital.com              ————————————————————————————————————————————————————————— 19/21 Catherine Place, London SW1E 6DX Tel: 0203 954 3430      www.crossbordercapital.com CrossBorder Capital Limited are authorised and regulated by the Financial Conduct Authority. Registered in England. Company Number 2687676.

Why Is Bond Market Volatility Collapsing? Reconsidering Global Liquidity Trends   Global Liquidity has recently fallen back to around US$165 trillion largely because of a drop in the size of the collateral pool that backs loans. This fall is closely linked to disruptions in World bond markets. Even if yields remain high, falling bond volatility could provide a welcome boost to Global Liquidity by reducing the size of ‘haircuts’ and raising the collateral multiplier. The size of the Fed’s RRP may be key?       See our latest published research, Global View - Why Is Bond Market Volatility Collapsing? Reconsidering Global Liquidity Trends - 4 th September 2023