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.


Macroeconomics

<ul>
<li>FOMC cuts rates 25bp in September and hints at more QE</li>
<li>Policy-makers appear willing to do more, but dissent growing inside Fed</li>
<li>Recent repo rate spikes do not portend another 2007/08, but they are a warning</li>
<li>Fed (and other Central Banks) need to massively expand their balance sheets</li>
</ul>


FOMC cuts rates 25bp in September and hints at more QE
Policy-makers appear willing to do more, but dissent growing inside Fed
Recent repo rate spikes do not portend another 2007/08, but they are a warning
Fed (and other Central Banks) need to massively expand their balance sheets


Another Financial Crisis? The US Repo’s Big Reverberations

<ul>
<li>Latest RRR cuts are only tactical and do NOT signal strategic monetary ease</li>
<li>
PBoC liquidity injections are the key monetary signal</li>
<li>
Liquidity jumped from May through July but August flat and September weak</li>
<li>No indication yet that PBoC easing aggressively….but they will</li>
</ul>


Latest RRR cuts are only tactical and do NOT signal strategic monetary ease

PBoC liquidity injections are the key monetary signal

Liquidity jumped from May through July but August flat and September weak
No indication yet that PBoC easing aggressively….but they will


Understanding Chinese Monetary Policy: Trying Hard to Ease?

<ul>
<li>Latest nowcast economic data show stronger Q3, 2019</li>
<li>
Shipping activity highlights bounce in July and August</li>
<li>
Global Liquidity conditions turning higher evidenced by rising gold</li>
<li>Bond markets heavily distorted by austerity policies and ‘safe’ asset shortage</li>
</ul>


Latest nowcast economic data show stronger Q3, 2019

Shipping activity highlights bounce in July and August

Global Liquidity conditions turning higher evidenced by rising gold
Bond markets heavily distorted by austerity policies and ‘safe’ asset shortage


The ‘Quick’ Recession … Is It Over Already? Latest Liquidity Data Agrees

<ul>
<li>Global Liquidity remains weak</li>
<li>Warns of insufficient balance sheet capacity to roll-over our huge debts</li>
<li>This creates excess demand for ‘safe’ assets that explain low Treasury yields</li>
<li>Implies ‘true’ Fed Funds nearer-6% than 2¼%: US Fed still far too tight</li>
</ul>

 
Global Liquidity remains weak
Warns of insufficient balance sheet capacity to roll-over our huge debts
This creates excess demand for ‘safe’ assets that explain low Treasury yields
Implies ‘true’ Fed Funds nearer-6% than 2¼%: US Fed still far too tight


Up, Up and Downnnnnnnn… Why This Crisis Is About Finance (Again) And Not About The Economy

<ul>
<li>Shanghai Accord 2.0 is well underway</li>
<li>US Federal Reserve steps up its liquidity injections into US money markets</li>
<li>Attempts by other economies to weaken their currencies against the USD will reinforce Fed easing</li>
<li>Gold and cryptocurrencies favoured. Asian and Emerging Markets later</li>
</ul>


Shanghai Accord 2.0 is well underway
US Federal Reserve steps up its liquidity injections into US money markets
Attempts by other economies to weaken their currencies against the USD will reinforce Fed easing
Gold and cryptocurrencies favoured. Asian and Emerging Markets later


The US Fed Steps-Up the Pace – Updating The Shanghai Accord 2.0

United States

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State Street Corporation services institutional investors and manages financial assets worldwide.  The Company's products and services include custody, accounting, administration, daily pricing, international exchange services, cash management, financial asset management, securities lending, and investment advisory services.

Tradeweb Markets Inc. builds and operates electronic marketplaces for rates, credit, equities/ETFs and money markets. The company serves institutional, wholesale and retail clients in 62 countries including large global asset managers, insurance companies, central banks, financial advisory firms, proprietary trading firms, hedge funds, banks and dealers.

Ameriprise Financial, Inc. is a financial planning and services firm.  The Company provides financial planning, products and services that are designed to be utilized as solutions for its clients' cash and liquidity, asset accumulation, income, protection, and estate and wealth transfer needs.

T. Rowe Price Group Inc. is a financial services holding company. The Company, through its subsidiaries, provides investment advisory services to individual and institutional investors. T. Rowe manages a broad range of U.S. and international stock, blended asset, bond, and money market mutual funds and other investment portfolios.

Nasdaq, Inc. operates a global stock exchange. The Company provides trading, clearing, exchange technology, regulatory, securities listing, and information services. Nasdaq offers its services worldwide.

Ares Management Corporation operates as an asset management firm. The Firm focuses on tradable credit, direct lending, private equity, and real estate markets. The Company also invest in all levels of a company capital structure-from senior debt to common equity. Ares Management serves university endowments, pension and sovereign wealth funds, banks, and insurance companies.

Northern Trust Corporation is a financial holding company that provides investment management, asset and fund administration, fiduciary, and banking solutions for corporations, institutions, and affluent individuals. Northern Trust's banking operations are its primary operations.

LPL Financial Holdings, Inc. offers technology, brokerage and investment advisory services through business relationships with all types of financial advisors. Through proprietary technology, custody and clearing platforms, the Company offers access to financial products and services that enable them to provide financial advice and brokerage services to retail investors.

Raymond James Financial, Inc. provides financial services to individuals, corporations, and municipalities through its subsidiary investment firms. The Company operates throughout the United States, Canada and overseas.

Macquarie Group Ltd. offers banking, financial advisory, investment and funds management services.  The Company offers financial advice, cash management, wealth management and private banking, life insurance, securities brokerage, corporate debt financing, real estate funds management, real estate development financing, investment funds management, and foreign exchange services.

CITIC Securities Co., Ltd. provides securities brokerage, trading, underwriting, investment banking, asset management, and investment consulting services.

Hong Kong Exchanges & Clearing Limited owns and operates the stock exchange, futures exchange, and their related clearing houses in Hong Kong.  The Company provides the trading platforms for a range of cash and derivatives products and the facilities for processing trades.

Deutsche Boerse AG provides a variety of stock exchange introduction, trading, and operational services to institutions and private investors. The Company offers electronic trading systems for buying and selling of securities on stock exchanges in Europe.  Deutsche Boerse offers indices such as DAX, MDAX, SDAX, and XTF, as well as trading in options and futures.

3i Group plc is an international investor focused on private equity, infrastructure and debt management. The Company's investments are located across multiple continents through local investment teams in Europe, Asia and North America.

Hong Kong Exchanges and Clearing Limited provides financial services. The Company offers securities trading, clearing, settlement and depository, and market data services. Hong Kong Exchanges and Clearing serves customers worldwide.

Hong Kong Exchanges & Clearing (HKXCY US)

Haitong Securities Co., Ltd. offers securities services. The Company provides securities brokerage, asset management, securities investment, share transfer agency, and capital intermediary services. Haitong Securities focuses on  online brokerage, wealth management, and institutional investors.

Haitong Securities Co Ltd (A) (600837 CH)

Huatai Securities Co., Ltd. provides financial company. The Company provides securities brokerage services, research consulting services, investment banking and direct investment services, fixed-income services and asset management services.

China Merchants Securities Co., Ltd. provides securities services. The Company offers securities brokerage, securities investment consulting, securities underwriting, and other services. China Merchants Securities also operates investment management.

China Merchants Securities Co Ltd (A) (600999 CH)

MSCI Inc. provides investment decision support tools to investment institutions worldwide. The Company produces indices and risk and return portfolio analytics for use in managing investment portfolios.

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MSCI Inc (MSCI US)

Another Financial Crisis? The US Repo’s Big Reverberations

FOMC cuts rates 25bp in September and hints at more QE Policy-makers appear willing to do more, but dissent growing inside Fed Recent repo rate...

Michael J. Howell

Understanding Chinese Monetary Policy: Trying Hard to Ease?

Latest RRR cuts are only tactical and do NOT signal strategic monetary ease PBoC liquidity injections are the key monetary signal Liquidity...

Michael J. Howell

The ‘Quick’ Recession … Is It Over Already? Latest Liquidity Data Agrees

Latest nowcast economic data show stronger Q3, 2019 Shipping activity highlights bounce in July and August Global Liquidity conditions turning...

Michael J. Howell

Up, Up and Downnnnnnnn… Why This Crisis Is About Finance (Again) And Not About The Economy

Global Liquidity remains weak Warns of insufficient balance sheet capacity to roll-over our huge debts This creates excess demand for ‘safe’...

Michael J. Howell

The US Fed Steps-Up the Pace – Updating The Shanghai Accord 2.0

Shanghai Accord 2.0 is well underway US Federal Reserve steps up its liquidity injections into US money markets Attempts by other economies to...

Michael J. Howell

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)