central banks dollar emerging markets FX liquidity Markets populism

Liquidity Drain And The ‘Still Playing Non-Stop Event Risk Cabaret’

The tide is going out.

The tide is going out.
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1 comment on “Liquidity Drain And The ‘Still Playing Non-Stop Event Risk Cabaret’

  1. this is one of the best articles I have seen on the ‘elephant in the markets’ that no one on cnbc wants to talk about. as the global reserve currency the dollar impacts everything, and when there is less of it (dollars), it becomes dear; and its dearness is mearsured in dollar-funding rates.

    an overlay of EEM from late 2014 to early 2015 vs the DXY shows us what can/will happen to em markets when the $ rises to a large extent quickly. strong dollar also brought on the US earnings recession of 2015.

    difference today is QE vs QT. Not only no new $ to circulate to buoy asset prices, but an actual decrease. few pundits are giving this topic the potential impact and likelihood it deserves.

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