The CrossBorder Capital Blog

Why The US Dollar Is Strong & Why It Could Get Even Stronger   A loose fiscal/ tight monetary policy mix is underpinning capital inflows into the US and pushing the US dollar higher. A strong dollar is not a consensus trade. However, it could prove self-correcting if the resulting disinflationary pressures compel the US Fed to ease monetary policy in 2024. It needs to be watched.       See our latest published research, Global View: Why The US Dollar Is Strong & Why It Could Get Even Stronger– 31 st October 2023   For further information, please contact us at research@crossbordercapital.com      

Capital Wars Redux   Did the US dollar just win the Battle for Currency Supremacy? And, following Xi’s surprise visit to the PBoC and another RMB2 trillion liquidity injection, is China’s economy about to boom again?     See our latest published research, Global View Capital Wars Redux – 25 th October 2023  

China and Emerging Market Liquidity: Before The Flood – Reassessing Emerging Markets After China's Shock Easing   Emerging Market Liquidity rose to an above-average reading of 61.3 at end-September 2023, driven higher by an uptick in Central Bank liquidity (index 70.2) and by robust cross-border capital inflows (index 73.7). Remarkably, even EM private sector cash flows are holding up and, probably, because commodity markets continue to remain elevated.         See our latest published research, China and Emerging Market Latest GLI™ – October 2023  

The Wrecking Ball Still Ripping Into US Bonds   Investors face a ‘duration crisis’ not (yet) a ‘credit crisis’. US 10-year Treasury yield could test 5½% because term premia when analysed closely still look too low. Pressures on term premia and yields are growing because of the unfavourable coupon supply outlook. A whopping near-US$11 trillion of gross US Treasury issuance is due before end-2024.     See our latest published research, Global View - The Wrecking Ball Still Ripping Into US Bonds – 23 rd October 2023  

Global Liquidity October Update: Prospects For 2024… Mr Bond Returns   ·          Global Liquidity Index (GLI™) climbs to a near-term high of 22.1 (range 0-100) ·          China's PBoC very loose liquidity stance (index 80.8) ·          Cross-border capital flows to Emerging Markets still robust (index 73.7) ·          Global Liquidity cycle in long-term upswing with peak around 2026     See our latest published research, Global Liquidity Latest – October 2023  

The Not (Yet) Credit Crisis   Markets are again testing the boundaries. We are not yet at the cliff-edge, but Treasury yields are hurtling towards it. The underlying problem is too much debt and the on-going burden of re-financing it. This ultimately requires more liquidity. The Fed has not yet thrown in the towel, but we anticipate a new acronym is coming: QS denoting a new policy of ‘quantitative support’ for markets.     See our latest published research, Global View - The Not (Yet) Credit Crisis – 5 th October 2023    

Inside the Bond Market: A Primer with Some Prospects   This report examines the background to the bond market. It explains the reasons why we have been bearish of duration (longer dated bond tenors) throughout this year, despite what has often been a backdrop of recovering Global Liquidity. We remain worried by the extremely depressed term premia component of bond yields.     See our latest published research, Global View - Inside the Bond Market: A Primer with Some Prospects – 2 nd October 2023