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>The 'trade recession' of 2023 is over, and the OECD CLI suggests global trade should grow 4.5% this year, after just 0.4% growth in 2023 (akin to global trade recession). </li>
<li>Despite a hot job market (unemployment rate below NAIRU for 3 years), record illegal and legal immigration (and their higher working-age proportion) are keeping US wage growth relatively in check. </li>
<li>MoM gains in core PCE were lower than core CPI in Feb'24, and likely will be in Mar'24 also, allowing a glide to lower core-PCE inflation and Jul'24 rate cut. </li>
</ul>


The 'trade recession' of 2023 is over, and the OECD CLI suggests global trade should grow 4.5% this year, after just 0.4% growth in 2023 (akin to global trade recession). 
Despite a hot job market (unemployment rate below NAIRU for 3 years), record illegal and legal immigration (and their higher working-age proportion) are keeping US wage growth relatively in check. 
MoM gains in core PCE were lower than core CPI in Feb'24, and likely will be in Mar'24 also, allowing a glide to lower core-PCE inflation and Jul'24 rate cut. 


US Benign This Year: Trade Recession Over, but Rates Still Likely to Decline

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 has been the key factor driving risk assets higher. It faces a short-term air pocket that investors need to understand</li>
<li>Three factors are dragging Global Liquidity -- the US Fed, the PBoC and the rising MOVE Index</li>
<li>Most important near-term, the US money market liquidity has suffered a major hit this week following the April 15th Tax-filing deadline. Next up the QFA at month-end</li>
</ul>



Global Liquidity has been the key factor driving risk assets higher. It faces a short-term air pocket that investors need to understand
Three factors are dragging Global Liquidity -- the US Fed, the PBoC and the rising MOVE Index
Most important near-term, the US money market liquidity has suffered a major hit this week following the April 15th Tax-filing deadline. Next up the QFA at month-end


The Liquidity ‘Air Pocket’: A Short Update After US Tax Filing-Week

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.

<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>Even though the number of observations is limited, we believe looking at the broader picture surrounding previous Bitcoin halvings provides valuable insights.</li>
<li>For example, all previous halvings occurred during equity bull markets, modest GDP growth, mild inflation, and easy or easier Federal Reserve monetary policy. Similar circumstances are on the horizon.</li>
<li>Declining Bitcoin supply, because of the halving and the rise of long-term investors, combined with the approval of US spot Bitcoin ETFs will likely become this halving's catalyst.</li>
</ul>


Even though the number of observations is limited, we believe looking at the broader picture surrounding previous Bitcoin halvings provides valuable insights.
For example, all previous halvings occurred during equity bull markets, modest GDP growth, mild inflation, and easy or easier Federal Reserve monetary policy. Similar circumstances are on the horizon.
Declining Bitcoin supply, because of the halving and the rise of long-term investors, combined with the approval of US spot Bitcoin ETFs will likely become this halving's catalyst.


Taking the Bitcoin Halvings Out of Isolation

<ul>
<li>Three events have changed investors' mood: US Quarterly Refunding (QRA), Fed FOMC Statement and H4.1 Release, and a downbeat October ISM Print</li>
<li>Most important by far is the QFA. This effectively 'added' a net US$80 billion of liquidity to US markets. It confirm 'fact' that QT effectively dead
</li>
<li>Risk still remain in our view. These events underscore a flat market in risk assets. Equity bull market still requires positive Central Bank liquidity injections and a stable bond market</li>
</ul>


Three events have changed investors' mood: US Quarterly Refunding (QRA), Fed FOMC Statement and H4.1 Release, and a downbeat October ISM Print
Most important by far is the QFA. This effectively 'added' a net US$80 billion of liquidity to US markets. It confirm 'fact' that QT effectively dead

Risk still remain in our view. These events underscore a flat market in risk assets. Equity bull market still requires positive Central Bank liquidity injections and a stable bond market


United States

The S&P 500® is widely regarded as the best single gauge of large-cap U.S. equities and serves as the foundation for a wide range of investment products. The index includes 500 leading companies and captures approximately 80% coverage of available market capitalization.

S&P 500 INDEX (SPX INDEX)

US Benign This Year: Trade Recession Over, but Rates Still Likely to Decline

Global trade volume grew 0.4% in 2023, but lead indicators suggest a strong 2024 recovery. Benign MoM rises in core PCE should enable YoY inflation...

Prasenjit K. Basu

The Liquidity ‘Air Pocket’: A Short Update After US Tax Filing-Week

Global Liquidity is the key factor driving risk assets. It faces an 'air pocket' over coming weeks. Investors need to understand the three factors...

Michael J. Howell

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!

Jeroen Blokland

Taking the Bitcoin Halvings Out of Isolation

Taking an in-depth look at previous Bitcoin halvings by taking them out of isolation by adding economic and market circumstances: Why Spot Bitcoin...

Jeroen Blokland

QT Dead...Risk On Again?

Risk asset markets are racing ahead. Is the bull back? We argue that not much has changed, except that QT (quantitative tightening) is effectively...

Michael J. Howell