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HKD has been trading on the strong side of its convertibility since late March. Factors accounting for that include Hibor-Libor spreads, IPO demands and HKMA’s interventions.
Chinese monetary policy is rapidly evolving and there was some changes today following the recent virus outbreak in Beijing. So I though it prudent to reword the final two paragraphs to better account for this. The rest of the blog and the graphs are unchanged.
We examine how ZIRP works, its impacts, likely timeframe, whether we expect rates to go negative (spoiler: we don’t) and options available to liquidity investors.
Our investment team navigated through the recent market volatility and, with the help of our clients, weathered through the market storm.
Hear how Global Liquidity stayed steadfast in our commitment to clients over the past two months.
Libor spreads are elevated, indicating cheapness in the funding markets, but we expect them to normalize in the near to medium term.
Learn from Global Liquidity Portfolio Manager, Aidan Shevlin, about latest monetary policies in Hong Kong and how that impacts HKD interest rates and investors.
Surging demand for U.S. Treasury bills (Tbills), in a “flight to quality” sparked by the coronavirus pandemic, created unusual market conditions.
Without support from central banks in the offshore space, Money Market Funds will likely be slow to get back up to full speed in purchases and duration, writes Olivia Maguire, Global Liquidity Portfolio Manager.
A new rule on calculating the supplementary leverage ratio—a capital adequacy measure—allows expanded balance sheets and potentially greater expansion of quantitative easing.
Olivia Maguire and Joe McConnell evaluate central bank reactions to COVID-19 in the UK and Europe.
Learn from Global Liquidity Portfolio Manager, Kyongsoo Noh, about key differences between the market environment today and 2008.
The Federal Reserve announced new programs on March 23, 2020. Learn from Global Liquidity Portfolio Manager, Kyongsoo Noh, on the latest facilities from the Fed.
Comments on the recent volatility and pace of monetary policy.
Making monetary policy: The Federal Reserve moves in the right direction
COVID-19 has the world on edge: What does this mean for short term fixed income, volatility and cash investing, cash policy.
Libor, the world’s most widely used benchmark for floating rate instruments, is transitioning SOFR.
We have extensive resiliency procedures in place to protect our employees, clients and businesses, ensuring we can continue to operate efficiently in times of stress.
The Covid-19 outbreak has accentuated the negative implications for international trade, as well as domestic productivity and tourism in Singapore.
The recent coronavirus (2019-nCoV) outbreak in China has increased investors’ trepidation and financial market uncertainty.
Trump vs Fauci; Positive US earnings and economic surprises; Sharp decline in Southern US infections; Mini-second waves in Australia and Europe; Voting by Mail and the 2020 election; The plausible deniability of question marks.
Prospects for further US employment and profits growth are improving, but the US is now running the 3rd highest infection rate in the world. In infection hotspot states, governors are relying on falling mortality as the reason to make only minor policy adjustments. This week, we look at why mortality is diverging from infections and hospitalizations, and more broadly, at whether a US scientific trust gap has played a role in the recent infection surge.
COVID temporarily reduced global CO2 emissions to 2006 levels. In our tenth annual energy paper, we examine when and how renewable energy transitions might result in more permanent reductions. We also analyze the financial, political and environmental risks to US energy independence, and whether stranded asset risk is the primary reason for the lowest oil and gas valuations in 90 years.
The US recovery; The flood of money and market returns; Globalization lives; Reducing COVID mortality through vascular treatments; Realistic timetables for never-been-done before vaccines; Sweden’s COVID experiment is not what you think
Tracking the rebirth of the US consumer with real time data as a function of infection levels and state policy. Additional topics: no evidence yet of material second waves of COVID infection, and a round-up of the latest news on vaccine trials (Moderna, Oxford, Sinovac) and anticoagulants.
In this week’s Eye on the Market, we review topics from our recent client Zoom calls. Topics include: risk of inflation, second waves of infection, the effectiveness of lockdowns and Biden’s taxation and spending agenda.
An update on the COVID-19 crisis as the US prepares to reopen despite having one of the highest infection rates in the world. Additional topics: monoclonal antibodies and anti-viral trials; the growing gap between markets and the economy; S&P 500 earnings haves and have-nots; regional equity performance (Europe loses again) and leveraged loans at a time of rising bankruptcies.
In this week’s note, we discuss the latest news on US infection trends and reopening plans, Remdesivir trial results and whether US fiscal stimulus is “enough”.
Lockdown relaxation and economic reawakening…are we there yet?
In this week's note, we take a close look at country and regional virus data, and examine the pitfalls of over-extrapolating trends that often reverse.
After the equity rally, P/E multiples are back at around 16x 2021 consensus earnings.
Virus trends and head-fakes, convalescent plasma and U.S. vs. China lockdowns.
There are things the government can try and fix during a pandemic and other things which it can't.
There are some difficult days ahead as quarantines and lockdowns grow. I want to share something with you from John Stuart Mill as we head into the unknown.
Michael Cembalest, Chairman of Market and Investment Strategy, has compiled his extensive research on coronavirus.
A lot of data is being made available on the coronavirus, but most of it requires careful analysis before drawing conclusions.
Confounding almost every forecast we saw last week, Senator Biden appears to have emerged from Super Tuesday with a sizeable delegate lead. Why might the night have turned out so differently from what was expected just a few days ago?
A Coronavirus update: severity, consequences and implications for investors.
Answers to questions on the coronavirus, US megacap stocks, the cost of Democratic Healthcare plans, the Iowa caucus and the problem with the student loan system.
Consensus reactions to the Phase I US-China deal are very skeptical, but may be missing the broader point. A brief note on what happened, and the alternatives.
After a very positive year for investors in 2019, we expect lower positive returns on financial assets in 2020 as some Ghosts of Christmas Past reappear.
How a discussion about China and Hong Kong morphed into a chart war about Trump, Hoover, Taft, Rachel Maddow and Anderson Cooper.
While recessions and bear markets are a fact of life, something peculiar happened after the Global Financial Crisis: the rise of the Armageddonists.
A close look at the Progressive Agenda, China’s deteriorating welcome mat in DC and US Tech IPOs.
Michael Cembalest analyzes the performance of over 6,700 domestic and international active equity managers and discusses the challenges they face.
A brief comment on a proposal from leading Presidential candidates to ban hydraulic fracturing everywhere, immediately.
It was a long, hot summer at the Heritage Foundation. An update from the front lines of the Trade War.
The food fight between the President and the Fed Chair could result in too much easing, and the expansion of valuations beyond sustainable levels.
Michael went on a search for Democratic Socialism in the real world, and ended up halfway around the globe from where he began.
Michael discusses how he should have taken Trump at his word on tariffs, and the impact of the widening trade war on global growth and equity markets as proposed tariffs approach pre-war levels.
The US-China trade war, prescription drug price legislation and the 2020 election.
Topics: unattainable objectives of the Green New Deal; overview of the world’s decarbonization challenges; Germany’s energy transition; Trump’s War on Science.
This paper, written by Tai Hui, examines the recent decline of the U.S. dollar and its implications on global markets.
A number of countries have seen a pick-up in new infections in recent weeks. Instead of derailing the global economy and forcing another dip in economic activities, the latest outbreaks are more likely to dampen and delay the global economy making a full recovery.
Equity markets have rebounded quickly from their March lows on the back of the unprecedented fiscal and monetary policy response. Although technology and healthcare are holding up relatively well compared to the more cyclical parts of the equity market, 2Q2020 should mark a low point for earnings.
Central banks are printing money and governments are showering it round the economy. Government debts levels are eye-wateringly high. It's no wonder investors are questioning whether a resurgence in inflation is on the cards.
After four days of negotiations the European Union (EU) council has come to an agreement on a EUR 1,074 billion Multiannual Financial Framework and a EUR 750 billion Next Generation EU recovery fund.
This paper, written by Marcella Chow and Chaoping Zhu, discusses the rebound in Chinese economic activity and its implications for investors.
The size of the U.S. Federal Reserve’s (Fed) balance sheet has started to shrink in recent weeks. Its balance sheet has declined 2.9%, or USD 210billion (bn), from its peak of USD 7.17trillion (tn) in June. Some investors are worried that the Fed is now intentionally dialing back its liquidity support and what the implication of this may be for markets.
The spread of the coronavirus and its impact on global economic activity has materially changed the investment outlook for 2020. In this piece we provide a framework for tracking infection rates globally and monitoring the impact on economic activity.
A consequence of the COVID-19 pandemic is that developed market central banks have pushed policy rates to zero, while engaging in asset purchases to keep bond yields low.
This paper, written by Kerry Craig, discusses the improving market sentiment and the outlook on equities.
This paper, written by Tai Hui, provides an update on fixed income investment opportunities.
This paper, written by Chaoping Zhu, provides a preview of China’s expected economic policies ahead of the National People’s Congress.
This paper, written by Tai Hui, provides an analysis of the potential long-term investment implications from COVID-19.
Investors are keenly monitoring the number of new infections around the world to gauge whether the COVID-19 outbreak is under control.
This paper, written by Chaoping Zhu, discussed the performance and outlook of Chinese economy, policies amid the global pandemic and implication for investors.
Spreads on emerging market (EM) bond yields have widened to levels not seen since the global financial crisis as concerns grow about the size of the economic downturn.
Oil prices collapsed in early March due to the price war between the Organization of the Petroleum Exporting Countries (OPEC), led by Saudi Arabia, and Russia
As governments around the world step up their fiscal packages to counter the economic fallout from the COVID-19 outbreak, the Chinese government is also following the same path.
Initial claims for unemployment insurance surged to the highest level ever: 3,283,000, spiking from a slightly revised 282,000 last week.
This paper, written by Dr. David Kelly, reviews the U.S> relief bill and its investment implications.
The U.S. Federal Reserve (Fed) has pulled out its alphabet bazooka in an effort to ensure sufficient liquidity and the smooth functioning of financial markets, while also providing credit to businesses that are affected by the spread of COVID-19 and the stall in global economic activity.
In the past two weeks, the traditional negative correlation between equities and government bonds has broken down.
The U.S. Federal Reserve (Fed) opted for another surprise rate cut this morning (March 16, Asia time), instead of waiting for the March 17-18 Federal Open Market Committee meeting.
It is important to avoid trying to predict the future; rather, clients are best served by monitoring the present situation and maintaining composure.
Worries about the spread of the COVID-19 virus continued to grip markets this week.
This paper, written by Tai Hui and Kerry Craig, addresses the latest equity markets’ correction and its investment implications.
The good news is that the number of new confirmed COVID-19 cases in China is coming down and that more people are now recovering than getting infected.
The U.S. Federal Reserve (Fed) has become a dominant player in the bond market through successive rounds of quantitative easing (QE).February 19, 2020
The economic fallout from the Coronavirus outbreak is expected to become more significant for the rest of Asia in the weeks ahead.
China will also need to start addressing the economic fallout soon, as businesses face significant pressure from disruption to consumption.
Investors are now asking whether inflation could return, threatening the rally in financial markets.
Policymakers on both sides of the Pacific have emphasized that they view their work as incomplete and that several issues remain un-addressed.
The U.S. and Chinese governments gave markets an early Christmas present when they agreed to a partial trade deal. However, much will depend on the details.
