From Seekingalpha · Mott Capital Management · · 1m 10s
Global Liquidity Shift Signals
Dollar and yen strength hint at changing financial flows.
In brief
Dollar and yen strength hint at changing financial flows. Rising Japanese and US rates may shift capital, tightening global liquidity and affecting risk assets. Originally reported by Seekingalpha.
Currency Strength Signals Shift
The Japanese yen and US dollar have strengthened across multiple currency pairs, even though the yen has remained relatively steady against the US dollar.
Rising Rates Prompt Capital Repatriation
Rising Japanese rates may prompt repatriation of capital, reducing the appeal of foreign debt for Japanese investors.
US Rates Outpace Peers
US 2-year rates outpacing peers are driving dollar strength, with widening spreads suggesting further weakness for currencies like the Swiss franc and euro.
Tightening Financial Conditions
Stronger USD and JPY could tighten global financial conditions, posing headwinds for risk assets and commodities if dollar hedging costs rise.
Mott Capital Management Insights
Michael Kramer leads the investing group Reading the Markets, where he helps members understand market drivers and where the market is likely heading.
Liquidity Regime Shift Impact
Rising Japanese and US rates may shift capital, tightening global liquidity and affecting risk assets.
The big picture
Rising Japanese and US rates may shift capital, tightening global liquidity and affecting risk assets.
