Cross-Currency Basis: The Price of Dollar Scarcity & FX Swaps
Understanding the Cross-Currency Basis: why Covered Interest Parity (CIP) fails, the mechanics of FX swap borrowing, and detecting global offshore dollar shortages.
11 Global FX Primers
Showing 11 Primers
Global Dollar & FX: Cross-Border Liquidity, Swaps & Currency Regimes
Cross-border dollar liquidity, FX swap basis dislocations, the Triffin dilemma, Bank of Japan JGB yield curve control spillovers, sovereign reserve de-dollarization, and Yen carry trade unwinds.
Foreign Official Treasury Holdings, TIC Data & NY Fed Custody Trends
How foreign central banks manage U.S. debt holdings, reading the monthly TIC capital flow reports, and monitoring weekly Foreign Custody data at the NY Fed.
Japanese Government Bonds (JGBs), BOJ Policy & Global Yield Spillovers
How Bank of Japan Yield Curve Control (YCC) exit and rising JGB yields impact the multi-trillion-dollar Japanese capital repatriation from US Treasuries and European bonds.
U.S. Dollar Index (DXY) Explained: Global Macro Impacts
Basket weighting, Stephen Jen
The Global Dollar Liquidity Cycle & Eurodollar System
How the offshore Eurodollar market, cross-currency basis swap spreads, and Fed central bank swap lines drive global liquidity.
The Current Account Deficit & The Triffin Dilemma
Why the U.S. must run perpetual trade deficits to supply global reserve currency liquidity, and the capital account surplus mirror.
The Yen Carry Trade Explained: Mechanics & Unwinds
How zero-interest rate yen funding trades function, what triggers catastrophic unwinds, and the global volatility feedback loop.
Covered & Uncovered Interest Rate Parity, Forward FX Points & Cross-Currency Basis Spreads
Institutional derivation of CIP, UIP, forward exchange points, money market day-count conventions, and why post-2008 cross-currency basis spreads persist.
Mechanics of the Japanese Yen Carry Trade: Leverage, Negative Skewness & Global Asset Contagion
Institutional analysis of the multi-trillion dollar JPY carry trade: negative return skewness, margin call spot thresholds, BoJ rate hike sensitivity, and the August 2024 unwind.
Sovereign FX Reserve Management: Weaponized Dollar Hegemony, Central Bank Gold Accumulation & Federal Reserve Swap Lines
Institutional analysis of sovereign foreign exchange reserve management, central bank de-dollarization, gold accumulation, and Federal Reserve swap line plumbing.
Balance of Payments Crises, Sudden Stops & Speculative Currency Runs
An institutional analysis of external currency crises: Krugman first-generation models, Calvo sudden stops, Guidotti-Greenspan reserve depletion, and twin deficit mechanics.