In today’s briefing:
- Global Liquidity Update – Is US Fed QT Dead?
- Global Liquidity – Is China Squeezing Or Easing Liquidity Again?
Global Liquidity Update – Is US Fed QT Dead?
- Global Liquidity is projected to rise in 2023 after last year’s tumble, but after its recent surge are we seeing a material pull-back?
- UK gilt crisis in September was a wake-up call. In the 23 following weeks, US Fed liquidity has flat-lined not fallen. US monetary policy is bifurcating
- Deteriorating US fiscal position will place huge demands for more QE. Between now and 2023 the Fed balance sheet could double in size. QT is dead in America
Global Liquidity – Is China Squeezing Or Easing Liquidity Again?
- China’s PBoC injected a whopping RMB 3 trillion (US$450 billion) into money markets through December and January
- Latest data show sharp fall-off in Chinese liquidity from late-February. Nonetheless, it is hard to extrapolate much from this. 2023 still looks to be a year of much more liquidity
- The close connection between the PBoC and Chinese business points to a stronger Chinese and World economy in the second half of 2023. Buy cyclicals?
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