Emerging Markets Liquidity-Based Tactical Asset Allocation - February 2015

by Michael J. Howell24. February 2015 15:49

This (new format) report uses latest liquidity data to assess risks and allocate to assets across the emerging markets. It seeks to avoid exposure where risks are greatest. Brazilian investment risks have lately fallen sharply. US risks remain low, but Chinese risks are rising again.



Liquidity-Based Tactical Asset Allocation, February 2015

by Michael J. Howell24. February 2015 15:48

This (new format) report uses latest liquidity data to assess risks and allocate to assets across international markets. It seeks to avoid exposure where risks are greatest. Eurozone and Brazil investment risks have lately fallen sharply. US risks remain low, but in other markets UK, Japan and China they are rising



Global Liquidity in 2014: Bigger, Faster, Stronger

by Michael J. Howell17. February 2015 11:42


Latest Global Liquidity Index (GLI) January 2015

by Michael J. Howell12. January 2015 19:21
Global Liquidity is starting 2015 on a downbeat. Our GLI index of liquidity conditions stands at 41.8 or down from its 45.9 end-November 2014 reading. Lower Global Liquidity warns of future financial and economic risk. Current levels of liquidity do not signal recession but they do point to economic slowdown over coming months and greater market volatility. Consistent with this picture Treasury yield curves are flattening and corporate credit spreads are widening. Our models are flagging a 'Risk Off' regime.


Global Liquidity Update

Global Liquidity Index (GLI) December 2014 Update

by Michael J. Howell13. December 2014 20:41
Global Liquidity continues to slip lower. According to our evaluation, investment markets remain locked in the late- cycle Speculation regime, with the strong bond markets telling a story in complete agreement with latest weak liquidity readings. The end-November 2014 GLI (Global Liquidity Index) stands at a slightly below neutral level of 44.5 ('normal' range 0-100) and this largely underpinned only by loose US liquidity (67.3). Developed Market liquidity conditions (47.3) are still better than Emerging Markets (33.2), with the far smaller Frontier Markets seeing sharp liquidity falls over recent months. Latest GLI data suggest a need for alertness among investors and some protection, but we reiterate that the liquidity backdrop looks reminiscent of the 1997-98 period, not (yet) 2007-08. The main risk continues to be a still stronger US dollar, which signals an additional Global Liquidity squeeze because of its key cross-border funding role in the World economy.


Tactical Style Selection - TSS November 2014

by Michael J. Howell13. November 2014 23:01
All current evidence points to the Speculation investment zone, according to our models. With Global Liquidity conditions set to further deteriorate over next 6-12 months, paced by Central Bank tightenings and slowing private sector cash flows, we expect 2015 to be a year of Turbulence. Our latest TSS reports published today for DM and EM detail the appropriate investment strategies.

Tags: ,

Global Liquidity November Update

by Michael J. Howell11. November 2014 14:43
Latest data for the month to end-October 2014 showed our GLI (Global Liquidity Index) rising a tad to 43.8 fom 43.0 in September ('normal' range 0-100). Global Liquidity remains below average and at levels associated with a step-up in market volatility and a step-downwards in future economic activity. Liquidity conditions remain high in the US at 67.9, but continue at low index levels of 21.3 in the Emerging Markets. The only liquidity bright spot in EM is India.


We're Turning Japanese Again...September 2014 Research Report

by Michael J. Howell15. October 2014 18:00
Falling Global Liquidity has heightened risks. Bonds are sounding persistent warnings that monetary deflation is back. Deflation is bad for equities and bad for economies. This report analyses the implications and predicts a new QE4


Latest Global Liquidity October Update

by Michael J. Howell15. October 2014 17:12
There are few bright spots in the latest GLI (Global Liquidity Index) data which shows a fall in the month to end-September 2014 from an index of 48.0 ('normal' range 0-100) to 45.0. Liquidity conditions are sub-par and this means three things (1) flattening bond yield curves and strong bonds; (2) increasing market volatility and (3) softer economies in the future. The main causes of weak liquidity are that Central Banks are not pumping sufficient liquidity; the private sector is suffering poor cash flow growth and that liquidity in many international markets is negatively leveraged to the strong US dollar. This is not yet 2007/08 again but it looks to us very much lik 1997/98!


Global Liquidity Index (GLI) August 2014 Update

by Michael J. Howell9. August 2014 11:44
The GLI (Global Liquidity) leading index of international capital and liquidity movements was slightly higher in July 2014 at 45.8 ('normal' range 0-100), from 44.6 in June. Developed economies have much stronger liquidity at a 62.5 index level, than Emerging Markets at 16.7. Headline global liquidity conditions are broadly unchanged over the past four months and remain a tad below average, but this disguises two major undercurrents: (1) there is an on-going switch in the direction of capital flows from Developed to Emerging Markets, even despite the fact that capital is again, as we write, quitting Russia; and (2) private sector liquidity is either weak or weakening, and Central Bank liquidity is either generally firm or strengthening.


Copyright © - All rights reserved