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>
International capital is quitting the US</li>
<li>Two key policy changes will spur these flows: the US excess inflation target and the formation of a notional pan-Asian dollar
</li>
<li>
Asian Central Banks appear to be collectively targeting their currencies to reduce volatility</li>
<li>The Euro and gold are likely to be the major beneficiaries of the USD fall</li>
<li>Stronger gold prices typically mean an EM equity boom
</li>
</ul>



International capital is quitting the US
Two key policy changes will spur these flows: the US excess inflation target and the formation of a notional pan-Asian dollar


Asian Central Banks appear to be collectively targeting their currencies to reduce volatility
The Euro and gold are likely to be the major beneficiaries of the USD fall
Stronger gold prices typically mean an EM equity boom



Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

Global indexes including the MSCI ACWI and ACWI ex-US are following in the MSCI EM index’s footsteps by breaking to new highs. This is bullish and signals a new leg higher is underway. Additionally, the US dollar is showing signs of a breakdown, something we view as a positive for global risk sentiment as long as the decline continues to be orderly. Overall our outlook remains bullish and we suggest buying any dips. Growth remains long-term leadership -- remain overweight. Attractive growth Sectors highlighted in today’s report include: Health Care, Services, Technology, and Communications

Global indexes including the MSCI ACWI and ACWI ex-US are following in the MSCI EM index’s footsteps by breaking to new highs. This is bullish and signals a new leg higher is underway. Additionally, the US dollar is showing signs of a breakdown, something we view as a positive for global risk sentiment as long as the decline continues to be orderly. Overall our outlook remains bullish and we suggest buying any dips. Growth remains long-term leadership -- remain overweight. Attractive growth Sectors highlighted in today’s report include: Health Care, Services, Technology, and Communications

U.S. Dollar Breakdown: Bullish For Ex-U.S. Equities

<ul>
<li>PBoC is easing through the ‘backdoor’ while keeping its balance sheet flat</li>
<li>Directed lending programs are fueling a step-up in credit growth</li>
<li>20% annualized pick-up in lending fastest since early-2016</li>
<li>Chinese equity exposure in portfolios relatively low. Risk assets look attractive</li>
<li>EM should also benefit from Chinese easing</li>
</ul>


PBoC is easing through the ‘backdoor’ while keeping its balance sheet flat
Directed lending programs are fueling a step-up in credit growth
20% annualized pick-up in lending fastest since early-2016
Chinese equity exposure in portfolios relatively low. Risk assets look attractive
EM should also benefit from Chinese easing


Chinese Easing Drives Next Phase of Liquidity-Driven Boom. Could EM Soar?

Global indexes remain overwhelmingly positive which is supported by the fact that there is a dearth of breakdowns. Overall our big picture view remains unchanged; overhead longer-term resistance on the MSCI EM, EAFE, and ACWI ex-US indexes (all priced in local currency) is something to be aware of, however if the ACWI-US is above $70 our intermediate-term outlook remains bullish and we suggest buying any dips. In today's report we highlight attractive charts within defensives (Consumer Staples &amp; Utilities), cyclicals (Consumer Discretionary, Energy, Financial, &amp; Materials), and in-between Sectors (Communications, Services, &amp; Health Care)

Global indexes remain overwhelmingly positive which is supported by the fact that there is a dearth of breakdowns. Overall our big picture view remains unchanged; overhead longer-term resistance on the MSCI EM, EAFE, and ACWI ex-US indexes (all priced in local currency) is something to be aware of, however if the ACWI-US is above $70 our intermediate-term outlook remains bullish and we suggest buying any dips. In today's report we highlight attractive charts within defensives (Consumer Staples &amp; Utilities), cyclicals (Consumer Discretionary, Energy, Financial, &amp; Materials), and in-between Sectors (Communications, Services, &amp; Health Care)

Global Equity Strategy: Stick With Technology

<ul>
<li>Our US dollar forex risk index which leads the DXY by 12 months is dropping</li>
<li>Dollar bear market signalled. Low point could come in late-2022
</li>
<li>Speed and size of Fed’s liquidity boost a key factor behind USD weakness</li>
<li>Concerns over ‘massive US dollar short’ position misplaced</li>
<li>Weak US dollar bullish for Emerging Markets and Asia</li>
</ul>


Our US dollar forex risk index which leads the DXY by 12 months is dropping
Dollar bear market signalled. Low point could come in late-2022

Speed and size of Fed’s liquidity boost a key factor behind USD weakness
Concerns over ‘massive US dollar short’ position misplaced
Weak US dollar bullish for Emerging Markets and Asia


China

The MSCI Em (Emerging Markets) Index is a free-float weighted equity index that captures large and mid cap representation across Emerging Markets (EM) countries. The index covers approximately 85% of the free float-adjusted market capitalization in each country.

MSCI Emerging Markets Index (MXEF INDEX)

Could Emerging Markets Double From Here?

International capital is quitting the US Two key policy changes will spur these flows: the US excess inflation target and the formation of a...

Michael J. Howell

U.S. Dollar Breakdown: Bullish For Ex-U.S. Equities

Global indexes including the MSCI ACWI and ACWI ex-US are following in the MSCI EM index’s footsteps by breaking to new highs. This is bullish and...

Vermilion Research

Chinese Easing Drives Next Phase of Liquidity-Driven Boom. Could EM Soar?

PBoC is easing through the ‘backdoor’ while keeping its balance sheet flat Directed lending programs are fueling a step-up in credit growth 20%...

Michael J. Howell

Global Equity Strategy: Stick With Technology

Global indexes remain overwhelmingly positive which is supported by the fact that there is a dearth of breakdowns. Overall our big picture view...

Vermilion Research

Why The US Dollar Could Fall By 25%?

Our US dollar forex risk index which leads the DXY by 12 months is dropping Dollar bear market signalled. Low point could come in late-2022 Speed...

Michael J. Howell