Even though the data is stale by the time of its eventual release, I think the TIC figures still maintain some relevance. If nothing else, even on a rear-facing basis, it provides more consistent data to confirm or deny previous narratives. To this point, that description includes central banks mobilizing dollar assets to deflect continuous dollar funding difficulties. The February [...]
I’m not sure what popular perception believes of international holdings of “reserves”, but I would wager there is a rather large disconnect between it and how the international system actually works. This is more than just theoretical notions of banking in eurodollar shadows, but the pipelines that connect and cross the globe. Central banks do not have massive stores of [...]
Though we have passed through the event horizon on taper finally, it is still difficult to understate how much the threat of it upset the various settled mannerisms of credit and dollar markets this past summer. Though there is a degree of calm in appearance now, there are certainly more than a few hints of markets still enthralled by some [...]
That gold prices are moving within range of the year’s lows is not at all surprising. We are in the midst of the fourth discrete episode of collateral/liquidity problems in interbank, wholesale “dollars” spilling over into gold markets. It is also not unexpected to see October 23 recur as an inflection in these indications. Gold forward rates ticked higher for [...]
The taper-driven bond selloff in May/June related to tightening in eurodollars and funding markets. As we know now, dollar conditions were extreme in some cases, leading to desperate turmoil across the globe. From the TIC flows, the pace of selling of dollar assets by foreign holders was epic back in June. What that tells us is foreign holders were unable [...]
The US$ shortage has been a theme around here for most of 2013. To this point, it has been largely hidden in the shadows and vagaries of modern global finance, only hinted at through secondary and tertiary indications. Even then, like the gold selloff, the dollar shortage was ambiguous and cunning. From repo warnings and the dire state of collateral [...]
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