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 matters hugely for World financial markets. Although Fed Liquidity is slowing, there are compelling signs that liquidity is rising elsewhere</li>
<li>
 Foreign holdings of US dollars are expanding once again, as flow migrate towards Asia. Many policy makers are monetizing these inflows.</li>
<li>
 China’s PBoC  stepped up her liquidity injections, adding RMB 1 trillion to money markets through June. This should have a positive effect on the Chinese and World economies  </li>
</ul>



 Global Liquidity matters hugely for World financial markets. Although Fed Liquidity is slowing, there are compelling signs that liquidity is rising elsewhere

 Foreign holdings of US dollars are expanding once again, as flow migrate towards Asia. Many policy makers are monetizing these inflows.

 China’s PBoC  stepped up her liquidity injections, adding RMB 1 trillion to money markets through June. This should have a positive effect on the Chinese and World economies  


<ul>
<li>
Global Liquidity is a crucial driver of investment markets, and US Fed liquidity refuses to slow down despite fears that policy interest rates will stay high</li>
<li>The key turning-point was last year's British gilt crisis. This was reinforced by the SVB and CSFB banking problem and prompted US banks' reserves to start rising</li>
<li>This US 'Stealth' QE will be underscored by greater Treasury bill issuance, which historically has led the Global Liquidity by six months</li>
</ul>



Global Liquidity is a crucial driver of investment markets, and US Fed liquidity refuses to slow down despite fears that policy interest rates will stay high
The key turning-point was last year's British gilt crisis. This was reinforced by the SVB and CSFB banking problem and prompted US banks' reserves to start rising
This US 'Stealth' QE will be underscored by greater Treasury bill issuance, which historically has led the Global Liquidity by six months


<ul>
<li>
Strong economies don't have strong financial markets. Best time for equities is when policy-makers are trying to revive sluggish economies</li>
<li>
Global Liquidity rises as economies slow, since slower real economies need less liquidity to operate and funds are shipped back into the financial sector. The cycle bottomed in October 2022
</li>
<li>Equities should be valued against inflation not bond yields. Inflation is falling and it coincides with rising Global Liquidity
</li>
</ul>



Strong economies don't have strong financial markets. Best time for equities is when policy-makers are trying to revive sluggish economies

Global Liquidity rises as economies slow, since slower real economies need less liquidity to operate and funds are shipped back into the financial sector. The cycle bottomed in October 2022

Equities should be valued against inflation not bond yields. Inflation is falling and it coincides with rising Global Liquidity



As The Economic Outlook Gets Worse, We’re Becoming More Upbeat

Global Multi-Asset Investment Strategist, True Insights

Jeroen Blokland

Global Multi-Asset Investment Strategist

Build Well-Diversified Multi-Asset Portfolios

True Insights

Our research helps investors build well-diversified multi-asset portfolios and profit from market developments. In addition, our unique and proven Macro – Sentiment – Valuation (MSV) investment framework ensures a consistent flow of new investment opportunities. Together with our market views, these opportunities will be reflected in our live ETF-based Global Multi-Asset Portfolios.

Macroeconomics

<ul>
<li>The Fed stuck with its intention to cut rates three times this year while penciling in one rate cut less for 2025 and 2026.</li>
<li>The key takeaway was that Powell is really keen on maintaining ample liquidity instead of what he calls abundant liquidity now. </li>
<li>Stocks, Gold, and Bitcoin love ample liquidity, especially when it becomes abundant again when the economy heads south.</li>
</ul>


The Fed stuck with its intention to cut rates three times this year while penciling in one rate cut less for 2025 and 2026.
The key takeaway was that Powell is really keen on maintaining ample liquidity instead of what he calls abundant liquidity now. 
Stocks, Gold, and Bitcoin love ample liquidity, especially when it becomes abundant again when the economy heads south.


March FOMC Meeting Conclusion: Powell Likes His Balance Sheet ‘BIG!

<ul>
<li>The main driver of asset prices looks set to stall, albeit temporarily. Global Liquidity is at a new all-time peak, but it is flat-lining</li>
<li>Global Liquidity compromised by a stumbling US Fed as it copes with the errant RRP and TGA, and by an erratic People's Bank of China. Q2 could prove tricky</li>
<li>Look to diversify elsewhere. Commodity markets are on the move. But strong economies do not always have strong financial markets</li>
</ul>


The main driver of asset prices looks set to stall, albeit temporarily. Global Liquidity is at a new all-time peak, but it is flat-lining
Global Liquidity compromised by a stumbling US Fed as it copes with the errant RRP and TGA, and by an erratic People's Bank of China. Q2 could prove tricky
Look to diversify elsewhere. Commodity markets are on the move. But strong economies do not always have strong financial markets


What Really Matters Is Global Liquidity...But It Looks Set to Zag Before It Zigs Higher

United States

The MSCI World Index is a free-float weighted equity index. It was developed with a base value of 100 as of December 31, 1969. MXWO includes developed world markets, and does not include emerging markets. MXWD includes both emerging and developed markets.

MSCI World Index (MXWO INDEX)

Global Liquidity … Still Rising?

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As The Economic Outlook Gets Worse, We’re Becoming More Upbeat

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March FOMC Meeting Conclusion: Powell Likes His Balance Sheet ‘BIG!

Even though the new Federal Reserve 'Dot Plot' looks marginally hawkish, Powell's strong emphasis on ample liquidity made markets cheer!

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What Really Matters Is Global Liquidity...But It Looks Set to Zag Before It Zigs Higher

Global Liquidity the main driver of asset performance is set to zag lower before it zigs higher. Be aware of this temporary setback. Look to...

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