Central Bank Mafia – Fed, ECB, BoJ Battle of the Balance Sheets

I believe we have a new pecking order for central banks.

DON Bernanke. Hitman Abe. And Cheerleader Draghi.

Now the racket has been exposed. It is the game of beggar thy neighbour and all the little central banks can only helplessly watch as the central banks with the biggest balance sheets win.

Fed – USD 3.47 trillion
BoJ – USD 1.88 trillion
ECB – USD 3.36 trillion

Compared to RBA’s USD 91.5 bio, MAS’s 258 bio, BOK’s USD 397 bio etc, I say, GET A LIFE ! Don’t bother to defend like India and Turkey are doing with their currencies or even think of a QE programme.

Additional data on weekly net flows across the world:
All bonds -$7.6bn
* EM Asia -$746mn
* DM Asia -$734mn
* EM Europe -$862mn
* Latam -$1.01bn
* Europe -$1.28mn
* N.America -$2.66bn  (outflows slowed significantly in NA)

All equities -$4.90bn
* EM Asia -$2.11bn
* DM Asia +$486mn
* EM Europe -$143mn
* Latam -$855mn
* Europe -$7mn
* N.America -$7.75n (outflows intensified in NA)

US and Canada suffered but the money is all on the side. 2.11 bn for EM Asia is significant. The money is on the side.

Tonight is triple witching – Eds and the stock futures. It looks like we will have a respite and a potentially sustained one into next week and the half year end. Risk remains that EM crumbles in the meantime.