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>Latest data show large withdrawals of US Liquidity thru May by the US Fed</li>
<li>This may be technical, but it echoes concerns expressed at the last FOMC</li>
<li>A taper may be coming. This could trigger another tantrum</li>
<li>Longer-term Fed must operate a ‘put’ and expand its balance sheet at close to 10% per annum to support debt roll-overs and fiscal spending plans</li>
</ul>


Latest data show large withdrawals of US Liquidity thru May by the US Fed
This may be technical, but it echoes concerns expressed at the last FOMC
A taper may be coming. This could trigger another tantrum
Longer-term Fed must operate a ‘put’ and expand its balance sheet at close to 10% per annum to support debt roll-overs and fiscal spending plans


Global QE: Is The US Fed About to Tighten?

<ul>
<li>V-shaped World economic rebound well-underway</li>
<li>Risk of policy-makers overstimulating</li>
<li>Financial stability a greater risk than faster high street inflation</li>
<li>Liquidity cycle more cyclical than ever</li>
<li>US dollar vulnerable to further falls</li>
<li>House prices likely to see bigger gains</li>
<li>Policy-makers will have to address these two imbalances</li>
</ul>


V-shaped World economic rebound well-underway
Risk of policy-makers overstimulating
Financial stability a greater risk than faster high street inflation
Liquidity cycle more cyclical than ever
US dollar vulnerable to further falls
House prices likely to see bigger gains
Policy-makers will have to address these two imbalances


Taper Talk – Will The Global Liquidity Boom End With A Whimper Or A Bang?

<ul>
<li>
No evidence that China’s People's Bank (PBoC) is tightening policy</li>
<li>
Liquidity conditions still look above average</li>
<li>China’s huge size means that Chinese Liquidity matters to the World</li>
<li>High and rising commodity prices suggest Chinese economy is expanding</li>
<li>
Cyclicals still favoured for investment</li>
</ul>



No evidence that China’s People's Bank (PBoC) is tightening policy

Liquidity conditions still look above average
China’s huge size means that Chinese Liquidity matters to the World
High and rising commodity prices suggest Chinese economy is expanding

Cyclicals still favoured for investment


Chinese Monetary Policy – Is China Really, Really Tightening??

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 global indexes (MSCI ACWI, ACWI ex-US, EM, and EAFE) continue to hold above critical support levels and market dynamics remain largely positive. Until this changes, we believe global equities are headed higher in the coming weeks and months. Additionally, we are reiterating our overweight recommendations on small-caps and value as we believe outperformance from these areas is likely to continue.

Major global indexes (MSCI ACWI, ACWI ex-US, EM, and EAFE) continue to hold above critical support levels and market dynamics remain largely positive. Until this changes, we believe global equities are headed higher in the coming weeks and months. Additionally, we are reiterating our overweight recommendations on small-caps and value as we believe outperformance from these areas is likely to continue.

Global Equity Strategy: Small-Caps and Value Stocks Remain in Focus

<ul>
<li>US 10-year Treasuries likely to test a 2½% yield base</li>
<li>Break-evens already up to speed with V-shaped economic rebound</li>
<li>Real rates likely to move up more substantially in next market phase</li>
<li>Equities benefit from higher inflation (early), but are hit when real rates jump</li>
</ul>


US 10-year Treasuries likely to test a 2½% yield base
Break-evens already up to speed with V-shaped economic rebound
Real rates likely to move up more substantially in next market phase
Equities benefit from higher inflation (early), but are hit when real rates jump


Will Rising US Yields Spoil World Equities?

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 QE: Is The US Fed About to Tighten?

Do latest liquidity data thru May and recent statements from FOMC point to a change in direction of US Federal Reserve policy towards tightness?

Michael J. Howell

Taper Talk – Will The Global Liquidity Boom End With A Whimper Or A Bang?

Global Liquidity really matters for asset prices. It is starting to inflect. Taper talk is rising. High Street inflation may not be the threat:...

Michael J. Howell

Chinese Monetary Policy – Is China Really, Really Tightening??

Despite the warning cries from many analysts we find no compelling evidence that China's People's Bank is tightening monetary policy. Rather...

Michael J. Howell

Global Equity Strategy: Small-Caps and Value Stocks Remain in Focus

We are reiterating our overweight recommendations on small-caps and value as we believe outperformance from these areas is likely to continue.

Vermilion Research

Will Rising US Yields Spoil World Equities?

Strength of the post-COVID economic rebound will push nominal US Treasury yields towards 2.5%, led by an increase in real rates. Equities are more...

Michael J. Howell