Global liquidity indicators & flows
Short-form analysis of TGA, RRP, money aggregates, credit growth and cross-border USD flows that drive risk assets.
Here's why bond yields skyrocketing worldwide ⬇️
Countries own a lot of US debt (bonds)
Moody's downgraded the US credit rating
Now, countries are at a higher risk of default, because the US debt they own is now less valuable = higher chance of country's default
(simplified)
🇷🇺 Ruble outflows into USD 🇺🇸
A lot of liquidity moved from RUB back into USD. This is also telling by the rebounded USD index
But gold will appreciate further. Russian Central Bank's massive gold reserves will pay off
2Y US Bond is a good factor/signal of FED funds rate, but there's an even better one!
CME's 30-day FED Funds futures is a derivative for this exact purpose. The market prices them according to the expectations of upcoming FED Funds Rates
🔗
This is definitely good news short-term for the USD!
Today, short-term funding got 1.25% cheaper for the US government, and once the FED lowers the interest rates, the yields will fall more. Now ofc this will lead to inflation & devaluation of USD, but that's a a different story
Look at that liquidity moving from short-term Chinese bonds(CN01Y), to short-term US bonds(US02Y) 👀
The market liked the removal of tariffs, however, you can't undo the massive volatility over the past 2 weeks
Moreover, US Dollar index is still below 100
🚨US 10 Year Bond yield spikes above 4.5% at open
I previously posted about the move of liquidity towards the Chinese bonds
The USD is facing an increased perceived risk, which in addition to the public debt puts questions on its role as the reserve currency
Regarding the bond market collapse ⬇️
US Treasury Securities are the main collateral used in repurchase agreements. Given that these are short-term, the yield spike is unlikely to lead to defaults
However, the fall in bond prices will reduce credit, adding to liquidity crunch
Lower USD Index = USD Devaluation = Higher premium for USD loans = Lower bond prices = Higher bond yields
It's all connected
🇺🇸 US Treasury bond yields are acting as a risky asset
Over 2% daily moves is something you see in crypto 👀
And I don't believe the FED will be raising rates - so it's a market-driven US debt premium increase
Lower rates incoming, but sovereign premium will still increase
🇪🇺🇺🇸US tariffs present a unique opportunity for EU's capital markets
Billions of $ are flowing out of US markets. Let that liquidity be parked in the EU. All that's needed is inviting conditions
It can start with a small, less-regulated market subsection to allow seamless foreign funds flow
Of course, this also gives China leverage - if The People Bank's of China (China's Central Bank) dumps their US Securities in the market, it will skyrocket bond yields, by reducing their prices
Who will lend to the US then, and at what premium? And at 125% debt to GDP 😬
Sure, if you:
Put tariffs
Lower interest rates
Remove tariffs
the maket will skyrocket
But that also means increased:
Asset bubble
Inflation
Public debt/deficit
Tariff income won't offset it
Monitor the hedge fund's shorts on risky assets, and when the
🇮🇳 Indian Rupee's M2 supply makes it even worse
Net importer + currency inflation is a recipe for depreciation and external dependence
If you think 🇺🇸USD M2 is bad, look at 🇷🇺Russia's
In 3 years, Ruble DOUBLED in supply. Up by a 100%
How come despite this, Ruble maintained its value in FOREX?
The answer is GOLD, more specifically its expansion in the balance sheet of Central Bank of Russia
It works 🤷♀️
🚨🇺🇸USD M2 Money Supply
⬆️ 790 days to increase M2 by $6.3T
⬇️ 550 days to decrease M2 by $1.1T
⬆️ 500 days to increase M2 by $1.1T
⏯️ QE never stopped, it merely paused
When inflation is blamed on tariffs, keep this in mind
🚨🇺🇸 USD M2 Money Supply is almost back at pre-interest rate increase levels
That QT didn't last after all 🤷♀️
🫧 Debt bubble about to pop
Borrowing is increasing & collateralization is decreasing
These are symptoms of a highly leveraged economy
Lowest (over)collateralization rate in 10 years. Surely a lot of that is caused by the huge amount of cheap credit issued during COVID, which… http
🤯 Think about all of those US market outflows due to DeepSeek, Qwen & Co.
$NVDA's & other AI-related stock crash wasn't just about cheaper AI-compute. The outflow also represents funds that may be potentially invested in the Chinese market
This point is often omitted 🤫 https://
Very interesting alternative USD market
Usual flow:
🇺🇸 buys oil from 🇸🇦, 🇸🇦 reinvest excess back into UST
New flow:
🇸🇦 reinvests excess into 🇨🇳-issued USD bonds
Result:
USD flows to 🇨🇳, instead of 🇺🇸, as the USD-denominated debt (bonds) are issued directly by 🇨🇳
💸 The dynamic supply of the BRICS currency is defined by a formula:
M = ForT + FDI + PI + ForEx + G&EX + InterSec + Der + ForDeposit + EuroCurrency + MTransfer + Etc.
This can be automated using smart contracts on the blockchain 🤖
Like Algorithmic stablecoins and Uniswap
🔍 Let's explore how the BRICS currency can leverage these technologies:
✅ Dynamic supply mechanism via smart contracts
✅ Legal compliance on-chain using ZKPs
✅ Integration with DeFi and zkLocus for authenticated private geolocation
👉 A cryptocurrency for Web3
🚨📈 $USDT liquidity on #DEX pools decreased to almost ZERO, while $USDC liquidity almost doubled
This is a result of mass swapping of $USDC for $USDT
🚨🔥 Over $1.5 billion $USDC have been burned in the last 8 hours
🚨📈 $USDC is the 2nd smart contract with the most gas usage on #Ethereum, second only to #Uniswap
$USDT is 4th, since massive swapping from $USDC to $USDT is taking across all pools in #DEX
Depegging of $USDC can lead to the collapse of other #stablecoins and #crypto prices
🚨📈 Mass $USDC to $USDT swapping has caused $BUSD to fall below $USDT by more than 1%
As $USDT reserves across #DEX are depleting, it's also affecting #CEX like #Binance
This is a result of the collapse of the Silicon Valley Bank, where $USDC has reserves
🚨 $USDC trading below $USD and $USDT above $USD
Looks like everyone is swapping $USDC for $USDT because of #SVB collapse
