Markets News 

Bank of America asked 65 investors their biggest fear — and the top response shows just how vulnerable markets are right now

“According to a Bank of America Merrill Lynch (BAML) survey of 65 credit investors, a sharp loss of liquidity is now their biggest worry of all” writes Joe Ciolli for businessinsider.com. It’s a relatively straightforward dynamic that’s played out countless times throughout market history, across a wide range of asset classes.Reduced liquidity makes it difficult for investors to trade without distorting markets. As other global central banks look to also look to end accommodation, the situation will compound.Luckily, in the spirit of preventing a mass exodus, investors in the credit…

Read More
Markets News 

One dirty word keeps popping up as Wall Street weighs the next market crash — and it should strike fear into the hearts of investors everywhere

“At the root of the issue is a dirty word that’s been showing up in Wall Street commentary with frighteningly increased regularity: liquidity “ writes Joe Ciolli for businessinsider.com. And no matter where you look in the market, liquidity is evaporating.A recent Wall Street Journal report showed that traders are finding it more difficult to move in and out of European corporate debt, as well as emerging-market government and corporate bonds.In the bond market, liquidity has become an international issue. Source: businessinsider.com Share This:

Read More
News Regulators 

BlackRock’s Rieder: Fed may have to slow hikes, stop balance sheet moves

“We are draining so much liquidity so fast with the Fed reducing its balance sheet and the Treasury issuing supply,” Rieder said” writes Patti Domm for cnbc.com. The Fed has been reducing the amount of securities it holds on its balance sheet by not replacing the Treasurys it holds as they mature.The Fed is confident in the economy now, but by next year it may have to slow interest rate hikes and stop paring back its balance sheet, according to Rick Rieder, BlackRock’s chief investment officer for fixed income.There is…

Read More
Markets News 

ILLIQUIDITY IS BACK: Big, unexpected market moves are happening more often as assets become less liquid, just like 2007

“That is what’s happening in global asset markets right now (and it’s what happened when financial markets collapsed in 2008), Sheets says” writes Jim Edwards for businessinsider.com. MS also has a worrying explanation for why surprises are becoming more frequent: Market liquidity across assets is in decline.Looking across asset markets (all the above plus currencies), they compared moves in the market versus expectations implied by futures options on those markets.That’s a very worrying sign for asset markets.But Morgan Stanley analyst Andrew Sheets and his team says that big unexpected moves…

Read More
News 

Trump’s trade battle has entered a ‘phoney war phase’ — here’s how to cut through the noise and make some money

“In the event that a full-scale trade war develops, the downside could be as much as 23% for Asian equities, UBS said” writes Will Martin for businessinsider.com. They are also pricing policy tightening, UBS said, making them “likely beneficiaries of easier liquidity in a trade war.”. “In real economic terms, it seems that we are still in the ‘phoney war’ stage,” the UBS team wrote in a note to clients on Wednesday. Source: businessinsider.com Share This:

Read More
Markets News 

A $1.9 trillion investor says there are already a bunch of ‘canaries in the coal mine’ that could send shockwaves through markets

“Rieder, who oversees $1.9 trillion in assets, has been voicing this concern for several months as central banks reduced their bond purchases” writes Akin Oyedele for businessinsider.com. The dollar’s rise this year, following its worst since 2003, is already weighing on emerging-market assets, according to Erin Browne, the head of asset allocation at UBS Asset Management.As central banks work quietly and slowly, more powerful forces are brewing in the foreground, Rieder said in a recent note.Powell’s remarks showed he was fairly untroubled about the rising risks of a trade war,…

Read More
Markets News 

Contrarian Edge: Why my firm sold short-term bond ETFs and bought U.S. Treasury bills

“As a side note, since we are on the topic of ETFs, today investors look at ETFs as a panacea and a way to get around active management” writes Vitaliy Katsenelson for marketwatch.com. Treasury bills are the safest securities in existence today, and they are yielding 2%, so we gain safety and increase yield at the same time.Liquidity is measured on two dimensions, time and price — it is the degree to which an asset can be bought or sold without impacting its price. Source: marketwatch.com Share This:

Read More
Markets News Stocks 

For China, an intentional weakening of its currency would be ill-timed

“As trade tensions flare up between the U.S. and China, many investors are asking whether Beijing will look to weaken its own currency to retaliate against Washington tariffs” writes Zhang Peng for cnbc.com. The Chinese yuan, which trades in a band versus the dollar, has now weakened to its lowest level since December 20 and saw a daily loss of 0.3 percent on Thursday. The weakening currency comes amid a slowing economic backdrop and a pickup in financial market volatility that has seen Chinese equities officially enter into bear territory…

Read More
News 

Santander Consolidates Corporate Cash Flows With Infosys Finacle

“U.K. financial institution Santander is collaborating with Infosys Finacle to enhance its interbank cash management solution, the companies revealed on Tuesday (June 26)” reports pymnts.com. Santander has adopted the Finacle Online Banking, Omnichannel Hub, Payment Solution and Liquidity Management Solution to support further corporate financial services development.For Santander, using Infosys Finacle technology means strengthened cash management, forecasting and payment services for business customers that need to access these tools from multiple devices.In an announcement on the Infosys website, its subsidiary, Infosys Finacle, said it will provide Santander U.K. with a…

Read More
News 

As trade war looms, China cuts some banks’ reserve requirements to boost lending

“The combined 700 billion yuan liquidity injection exceeded market expectations of 400 billion yuan” writes Midwest Communications Inc for 95kqds.com. The PBOC said the cut will release about 500 billion yuan ($77 billion) for the country’s five large state banks and 12 national joint-stock commercial banks.The latest RRR cuts will also release about 200 billion yuan in funding for mid-sized and small banks to increase lending to credit-strapped small businesses, the PBOC said.But the 700 billion yuan ($107.65 billion) in liquidity that the central bank said will result from the…

Read More