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>QE5 is here (we just had QE4), QE6 is coming and probably others. Cutting interest rates is a bad move which could even destroy short-term liquidity</li>
<li>
US Fed balance sheet is set to test US$6 trillion under the latest QE5</li>
<li>Next round of coronavirus crisis will strain US$ forex swap and funding markets as supply-chain payments fall and lead to QE6</li>
<li>We expect near-term firm US dollar, and later much stronger gold price and steeper yield curves. Pattern of crisis has similarities with 9/11, which had economic effects lasting over 4 months. The coronavirus crisis may be shorter, but it will be both more extensive and more severe.</li>
</ul>


QE5 is here (we just had QE4), QE6 is coming and probably others. Cutting interest rates is a bad move which could even destroy short-term liquidity

US Fed balance sheet is set to test US$6 trillion under the latest QE5
Next round of coronavirus crisis will strain US$ forex swap and funding markets as supply-chain payments fall and lead to QE6
We expect near-term firm US dollar, and later much stronger gold price and steeper yield curves. Pattern of crisis has similarities with 9/11, which had economic effects lasting over 4 months. The coronavirus crisis may be shorter, but it will be both more extensive and more severe.


Why The Latest Liquidity Crisis Means QE5 & QE6

<ul>
<li>This is a liquidity crisis, where fungibility disappears and Central Banks simply have to act</li>
<li>Expect QE5 (we just had QE4), QE6 and others. US Fed balance sheet set to break US$5 trillion. Cutting interest rates is a bad move which could even destroy short-term liquidity</li>
<li>Next round of coronavirus crisis will strain US$ fx swap and funding markets as supply-chain payments fall</li>
<li>Expect near-term firm US dollar, and later much stronger gold price and steeper yield curves</li>
</ul>


This is a liquidity crisis, where fungibility disappears and Central Banks simply have to act
Expect QE5 (we just had QE4), QE6 and others. US Fed balance sheet set to break US$5 trillion. Cutting interest rates is a bad move which could even destroy short-term liquidity
Next round of coronavirus crisis will strain US$ fx swap and funding markets as supply-chain payments fall
Expect near-term firm US dollar, and later much stronger gold price and steeper yield curves


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

Major indexes broke below the key support levels we were watching on the Nasdaq Composite (8,264), S&amp;P 500 (2,855), DJI (24,681) and Russell 2000 (1,448), ushering-in additional downside. We view these levels as logical areas of potential short-term resistance moving forward.   In today’s report we highlight attractive Groups and stocks within Health Care and Services: Pharmaceuticals, Mega- &amp; Large-Cap , Biotech , Diagnostic &amp; Test Products, Diagnostic &amp; Test Services, and Education Svcs., China

Major indexes broke below the key support levels we were watching on the Nasdaq Composite (8,264), S&amp;P 500 (2,855), DJI (24,681) and Russell 2000 (1,448), ushering-in additional downside. We view these levels as logical areas of potential short-term resistance moving forward.   In today’s report we highlight attractive Groups and stocks within Health Care and Services: Pharmaceuticals, Mega- &amp; Large-Cap , Biotech , Diagnostic &amp; Test Products, Diagnostic &amp; Test Services, and Education Svcs., China

<ul>
<li>Gold should test US$2000/ oz over the next 12 months</li>
<li>Central Bank Liquidity drives gold higher</li>
<li>US Federal Reserve set to expand its balance sheet to US$4.75 trillion by late—2020</li>
<li>China’s People’s Bank (PBoC) is also very important. PBoC injections set to soar higher</li>
</ul>


Gold should test US$2000/ oz over the next 12 months
Central Bank Liquidity drives gold higher
US Federal Reserve set to expand its balance sheet to US$4.75 trillion by late—2020
China’s People’s Bank (PBoC) is also very important. PBoC injections set to soar higher


This Gold Bull Market Is Being Made in Beijing

We believe U.S. equities remain bullish but if they are to continue their ascent we would prefer that those areas also associated with economic expansion could also grab some of the upward momentum. This includes; Energy, Materials, Industrial Manufacturing and the Transportation Sector and even Small-caps. A narrowing of breadth as we have all seen in the past does not typically end well.  Open the attached file to read our complete U.S. Strategy document, and to find links to detailed comments and recommendations for each of our 12 Sectors.

We believe U.S. equities remain bullish but if they are to continue their ascent we would prefer that those areas also associated with economic expansion could also grab some of the upward momentum. This includes; Energy, Materials, Industrial Manufacturing and the Transportation Sector and even Small-caps. A narrowing of breadth as we have all seen in the past does not typically end well.  Open the attached file to read our complete U.S. Strategy document, and to find links to detailed comments and recommendations for each of our 12 Sectors.

U.S. Equity Strategy: Bullish, but Extended

United States

Gold is a chemical element with the symbol Au (from Latin: aurum) and the atomic number 79. In its purest form, it is a bright, slightly reddish yellow, dense, soft, malleable and ductile metal. Chemically, gold is a transition metal and a group 11 element. It is one of the least reactive chemical elements, and is solid under standard conditions. The metal therefore occurs often in free elemental (native) form, as nuggets or grains, in rocks, in veins and in alluvial deposits. It occurs in a solid solution series with the native element silver (as electrum) and also naturally alloyed with copper and palladium. Less commonly, it occurs in minerals as gold compounds, often with tellurium (gold tellurides).

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Why The Latest Liquidity Crisis Means QE5 & QE6

QE5 is here (we just had QE4), QE6 is coming and probably others. Cutting interest rates is a bad move which could even destroy short-term...

Michael J. Howell

GFC2? Liquidity Crisis

This is a liquidity crisis, where fungibility disappears and Central Banks simply have to act Expect QE5 (we just had QE4), QE6 and others. US Fed...

Michael J. Howell

S&P 500: Long-Term Oversold

Major indexes broke below the key support levels we were watching on the Nasdaq Composite (8,264), S&P 500 (2,855), DJI (24,681) and Russell...

Vermilion Research

This Gold Bull Market Is Being Made in Beijing

Gold should test US$2000/ oz over the next 12 months Central Bank Liquidity drives gold higher US Federal Reserve set to expand its balance sheet...

Michael J. Howell

U.S. Equity Strategy: Bullish, but Extended

We believe U.S. equities remain bullish but if they are to continue their ascent we would prefer that those areas also associated with economic...

Vermilion Research

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