In the penultimate dispatch, we documented the fact that our measure of global liquidity, the flux of cross-border banking flows, predicts one quarter ahead returns on the dollar. Informed readers immediately wondered how the risk-bearing capacity of US securities broker-dealers, risk appetite for short, relates to our measure of global liquidity. On Twitter, where Bruno Bonizzi asked me this question, I responded that, given our understanding of the role played by risk appetite in global markets, risk appetite
Cross-border banking flows predict risk appetite
Cross-border banking flows predict risk…
Cross-border banking flows predict risk appetite
In the penultimate dispatch, we documented the fact that our measure of global liquidity, the flux of cross-border banking flows, predicts one quarter ahead returns on the dollar. Informed readers immediately wondered how the risk-bearing capacity of US securities broker-dealers, risk appetite for short, relates to our measure of global liquidity. On Twitter, where Bruno Bonizzi asked me this question, I responded that, given our understanding of the role played by risk appetite in global markets, risk appetite