Highlights Central banks globally have turned dovish, with the Fed virtually promising to cut rates in July. But this will be an “insurance” cut, like 1995 and 1998, not the beginning of a pre-recessionary easing cycle.…
Highlights Fed policy is likely to proceed in two stages: An initial stage characterized by a highly accommodative monetary policy, followed by a second stage where the Fed is raising rates aggressively in response to…
Highlights The sharp fall in the bond-to-gold ratio is an important signal to pay heed to. It might suggest that confidence in the U.S. dollar is finally waning. If correct, the sharp rally in crypto currencies over the past few…
The monetary base includes: The balance of the clearing accounts of banks kept with the Hong Kong Monetary Authority (HKMA). Exchange Fund bills and notes – securities issued by the Exchange Fund to manage excess…
The pertinent measure of any exchange rate backing is the ratio of FX reserves to broad money supply. Indeed, households and companies can not only use cash in circulation but also their deposits to acquire foreign currency.…
Highlights U.S. consumption remains robust despite the recent intensification of global growth headwinds. The G-20 meeting will not result in an escalation nor a major resolution of Sino-U.S. tensions. Kicking the can down the road is…
Highlights When it comes to policy easing, the euro area 5-year yield at -0.15 percent is running out of road, while the U.S. 5-year yield is still at the dizzying heights of 1.8 percent. Hence, the ECB is likely to come out the loser…
Highlights A rare market trifecta – propelled by investors seeking safe-haven assets, inflation hedges in the wake of the Fed’s dovish turn this past week, and portfolio diversification – will continue to keep gold well…
Interest rate differentials are moving against the dollar, but our important takeaway – that gold continues to outperform Treasurys – is an ominous sign. Gold has stood as a viable threat to dollar liabilities, any sign…