Equity Derivatives and Volatility Specialist, Clifton Derivatives

John Ley

Equity Derivatives and Volatility Specialist

Clifton Derivatives

Independent derivative and volatility research firm focusing on events/catalysts, earnings, relative value and cross asset volatility strategies.

Equity Derivatives

iShares 20+ Year Treasury Bond ETF / Equity Derivatives

<ul>
<li>TLT is showing signs of shifting behavior, no longer acting like a classic flight-to-quality asset.</li>
<li>One-Month implied vol sits above average, though not at extreme levels.</li>
<li>The evolving vol structure suggests caution for those expecting traditional bond market flight to quality behavior.</li>
</ul>


TLT is showing signs of shifting behavior, no longer acting like a classic flight-to-quality asset.
One-Month implied vol sits above average, though not at extreme levels.
The evolving vol structure suggests caution for those expecting traditional bond market flight to quality behavior.


TLT – From Hedge to Risk Asset: Behavior Continues to Shift

Cross-Asset Liquidity Strategist, CrossBorder Capital

Michael J. Howell

Cross-Asset Liquidity Strategist

Implementing Research Using Alt Data & AI

CrossBorder Capital

CrossBorder Capital is a London-based independent investment advisory firm. Founded in 1996, it exploits a gap in the investment arena by focusing on Central bank liquidity. 

It specialises in the monitoring and analysis of global liquidity flows - an important determinant of asset prices, from currencies through to bonds, equities and real estate.

CrossBorder Capital implements its investment strategy and currently manages over US$ 350m.


Cross Asset Strategy

<ul>
<li>
Global Liquidity Cycle hit a low in September 2022. It has been rising slowly since and looks set to hit a peak around 2026. Risk assets should get greater support</li>
<li>Yet the large 'carry' on government bonds and the recent sell-off persuades us to allocate towards fixed income for the first time in two years</li>
<li>There are risks. With coupon issuance is set to soar, Central Banks will be increasingly asked to finance monetary inflation
</li>
</ul>



Global Liquidity Cycle hit a low in September 2022. It has been rising slowly since and looks set to hit a peak around 2026. Risk assets should get greater support
Yet the large 'carry' on government bonds and the recent sell-off persuades us to allocate towards fixed income for the first time in two years
There are risks. With coupon issuance is set to soar, Central Banks will be increasingly asked to finance monetary inflation



<ul>
<li>The sell-off in government bonds could have further to go. US Treasury 10-year yields could test 5%</li>
<li>This fall in the value of prized collateral threatens to undermine the entire financial system, hit Global Liquidity hard and damage equities</li>
<li>Threat is most visible in very depressed levels of US bond term premia. Watch the slated step-up in Treasury coupon issuance and likely decline in foreign buying of US debt </li>
</ul>


The sell-off in government bonds could have further to go. US Treasury 10-year yields could test 5%
This fall in the value of prized collateral threatens to undermine the entire financial system, hit Global Liquidity hard and damage equities
Threat is most visible in very depressed levels of US bond term premia. Watch the slated step-up in Treasury coupon issuance and likely decline in foreign buying of US debt 


It's A Duration Crisis, Not (Yet) A Credit Crisis… Bonds, Not Banks Look Dangerous

<ul>
<li>
Global Liquidity has been a key driver of risk assets, but it is starting to skid lower</li>
<li>Problem is NOT tightening of liquidity by Central Banks, rather Collateral pools are wobbling in wake of Japan’s YCC change
</li>
<li>
US Treasury markets face growing challenge from domestic coupon calendar, Fitch downgrade and threat from proposed gold-backed BRICS currency</li>
</ul>



Global Liquidity has been a key driver of risk assets, but it is starting to skid lower
Problem is NOT tightening of liquidity by Central Banks, rather Collateral pools are wobbling in wake of Japan’s YCC change


US Treasury markets face growing challenge from domestic coupon calendar, Fitch downgrade and threat from proposed gold-backed BRICS currency


Chief Economist & Political Strategist, CrossASEAN Research

Prasenjit K. Basu

Chief Economist & Political Strategist

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Macroeconomics

<ul>
<li>A divided FOMC cut by 25bp as expected, but Powell signalled Dec'25 cut was far from a foregone conclusion; instead the FOMC was strongly committed to returning to 2% inflation. </li>
<li>US$88.8bn decline in base money (Mar-Aug'25) has held M2 and inflation in check. The end of QT from Dec'25 will be a form of easing, precluding rate cuts until Jan'26. </li>
<li>FOMC voting shows doves isolated, and Powell-led FOMC will stay hawkish until Jan'26, especially amid fogginess on inflation data. The next rate cut is unlikely until Mar'26. </li>
</ul>


A divided FOMC cut by 25bp as expected, but Powell signalled Dec'25 cut was far from a foregone conclusion; instead the FOMC was strongly committed to returning to 2% inflation. 
US$88.8bn decline in base money (Mar-Aug'25) has held M2 and inflation in check. The end of QT from Dec'25 will be a form of easing, precluding rate cuts until Jan'26. 
FOMC voting shows doves isolated, and Powell-led FOMC will stay hawkish until Jan'26, especially amid fogginess on inflation data. The next rate cut is unlikely until Mar'26. 


US: No More Rate Cuts Likely from the Powell Fed; More Dovish FOMC by Q2 2026

United States

iShares 20+ Year Treasury Bond ETF is an exchange-traded fund incorporated in the USA.  The ETF seeks to track the investment results of an index composed of U.S. Treasury bonds with remaining maturities greater than twenty years. 

iShares 20+ Year Treasury Bond ETF (TLT US)

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

iShares 20+ Year Treasury Bond ETF (TLT US)

TLT – From Hedge to Risk Asset: Behavior Continues to Shift

TLT's changing behavior indicates caution for investors expecting traditional flight-to-quality bond market dynamics due to evolving volatility...

John Ley

Global Liquidity: Looking Towards 2024

The upbeat narrative continues. Worth re-exploring why Global Liquidity, which has been the main driver of markets in recent years, is set to...

Michael J. Howell

It's A Duration Crisis, Not (Yet) A Credit Crisis… Bonds, Not Banks Look Dangerous

This is not a credit crisis involving private debt, but a duration crisis affecting public debt. The entire base of the financial system and the...

Michael J. Howell

Could Global Liquidity Skid Lower?

Global Liquidity the key driver of risk assets is skidding, NOT from tightening of liquidity by Central Banks, rather Collateral pools are wobbling...

Michael J. Howell

US: No More Rate Cuts Likely from the Powell Fed; More Dovish FOMC by Q2 2026

FOMC cut by 25bp, but wants to bring inflation back to 2% target. No-QT amounts to easing, precluding rate cuts until Jan'26, with next cut...

Prasenjit K. Basu

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

TLT – From Hedge to Risk Asset: Behavior Continues to Shift

​TLT's changing behavior indicates caution for investors expecting traditional flight-to-quality bond market dynamics due to evolving volatility...

John Ley

Global Liquidity: Looking Towards 2024

The upbeat narrative continues. Worth re-exploring why Global Liquidity, which has been the main driver of markets in recent years, is set to...

Michael J. Howell

It's A Duration Crisis, Not (Yet) A Credit Crisis… Bonds, Not Banks Look Dangerous

This is not a credit crisis involving private debt, but a duration crisis affecting public debt. The entire base of the financial system and the...

Michael J. Howell

Could Global Liquidity Skid Lower?

Global Liquidity the key driver of risk assets is skidding, NOT from tightening of liquidity by Central Banks, rather Collateral pools are wobbling...

Michael J. Howell

US: No More Rate Cuts Likely from the Powell Fed; More Dovish FOMC by Q2 2026

​FOMC cut by 25bp, but wants to bring inflation back to 2% target. No-QT amounts to easing, precluding rate cuts until Jan'26, with next cut...

Prasenjit K. Basu

TLT's changing behavior indicates caution for investors expecting traditional flight-to-quality bond market dynamics due to evolving volatility...

FOMC cut by 25bp, but wants to bring inflation back to 2% target. No-QT amounts to easing, precluding rate cuts until Jan'26, with next cut...