Dollar liquidity shortages tend to be vicious because they trigger negative feedback loops. As offshore dollar rates begin to rise, they lift the cost of capital for borrowing countries. Debt repayment replaces capital spending…
The drag on global dollar liquidity created by the Fed’s balance sheet runoff will soon end. The Fed’s balance sheet peaked just above US$4.5 trillion in early 2015 and has been falling since. A severe contraction in…
Highlights The U.K. economy has been holding up fairly well, despite the overhang of political uncertainty. However, even before the actual withdrawal of the U.K. from the E.U. has occurred, Brexit has left a lasting mark on the U.K.…
Dear Client, Owing to BCA’s 40th Annual Investment Conference at the Grand Hyatt in New York City next week, there will be no report on Wednesday, September 25. We will return to our regular publication schedule on Wednesday,…
The contraction in manufacturing and EM trade volumes is largely the result of the Fed’s rates-normalization policy last year, and China’s deleveraging campaign in 2017-18. These policies lifted the value of the…
Highlights The lack of dollar liquidity has been a tailwind behind the dollar bull market. Going forward, an end to a contraction in the Federal Reserve’s balance sheet should help stem the global shortage of dollars. Outside…
Please note that this abbreviated weekly report complements today’s Special Report titled China’s Foreign Debt, And A Secret Weapon published in collaboration with BCA’s China Investment Strategy service. Feature A…
The tug of war between deteriorating global growth and easing liquidity conditions cannot last forever. Either the dollar breakout morphs into a panic buying frenzy or proves to be a bull trap. Are we at the cusp of a bottom in…