The Perfect Storm for a Massive Market Boom is Brewing

Global Liquidity has risen by another 0.92% and is now standing at $132.8T, the highest level since early 2022.

Our RoC remains in a bullish state.

‍

Improved collateral values and PBoC's actions were the key drivers of this increase.

However, the Fed has yet to deploy a stimulus that would significantly impact the markets.

‍

China was the "big news" last week, and their stock index has been basically rising in a straight line since the stimulus.

We expect the rest of the world to follow China's pace, and even though their stimulus might not have been enough - more will come.

‍

This week brings a lot of macro data from the US, including the unemployment rate and NFP. With the Fed having basically "beaten" the inflation, their "official" focus is now on employment.

Markets are currently pricing in a 42% probability of another 50bp rate cut in November, and if the upcoming data comes in lower than expected, the likelihood of a 50bp cut will increase more.

‍

The ECB is also expected to cut rates this month. While rate cuts are a positive signal that central banks are moving towards easing, they aren't the main driver of risk assets.

Our liquidity index has been rising steadily even without rate cuts, with Bitcoin and Gold (aka main hedges against monetary inflation) closely following it.

‍

Arguably, we might see some weakness going into October, but the outlook for the rest of the year should be bullish.