TSS - Major Markets Report, August 2015

The red and amber lights on our risk dashboard (pp10-11) are starting blink warnings. Two major risks are building for markets over coming months: (1) well-flagged prospect of US monetary tightening. Latest liquidity data show the Fed likely preparing for a September interest rate rise. The sliding US economy, evident in latest data, will mitigate rather than stop this move. (2) A sharp fall in Chinese Liquidity data in July 2015. Together, these trends pushed our GLI™ (Global Liquidity Index) down to a low 44.8 reading for end-July 2015 (‘normal’ range 0-100), reversing its recent rebound.