全球市场 “年初躁动”，一切都是流动性

It's that time of year again, the "restless" season, and whenever market enthusiasm is high, as macro researchers, we often habitually look at the underlying logic, emotions, and risks. Since the beginning of the year, there have been changes in the international situation, but market asset prices have still maintained an upward trend. Major global stock markets have almost experienced "indiscriminate rises": the stock markets in the United States, Japan, South Korea, Singapore, and others have all hit historical highs, and the Shanghai Composite Index has also reached a 10-year high; silver, which has recently been a representative of volatility, saw an increase in the first three trading days of 2026, with the rise at one point covering last year's cumulative correction. Although short-term market sentiment is positive, it is still meaningful to examine potential turning signals and macro paths from a mid-term perspective.

How should we view the liquidity and sentiment of the market at the beginning of this year? We believe the key is to distinguish between "big" expectations and "small certainties."

First is the "small certainty" of short-term catalysts—the recovery of liquidity and sentiment "compared to before." After the "Quadruple Witching Day" (the third Friday of the month when a large number of options and futures expire) in December last year, market trading activity significantly declined—this was the fastest and largest decline in nearly five years (see Figure 3). During the time window of declining market activity, liquidity risk events did occur: the Chicago Mercantile Exchange continuously raised the margin ratio for precious metal futures to control market volatility, exacerbating the "roller coaster" trend of precious metals. Coincidentally, in the last week of December last year, the Federal Reserve conducted intensive overnight repurchase operations to supplement liquidity, giving the illusion of "stepping in to stabilize the market." However, after the New Year holiday, trading quickly resumed, liquidity returned, and the market welcomed a relatively significant rebound.

Secondly, the "small certainty" of liquidity being relatively loose at the beginning of the year. On one hand, the main line of fiscal expansion has not changed; whether in election-year America, Japan in its first year under a new prime minister, or Europe pursuing "revival," there is a strong impulse for fiscal efforts, whether active or passive. This can also be somewhat corroborated by the strong correlation between gold and silver prices and Japanese long-term government bond yields.

On the other hand, there is the "small certainty" of easing brought about by slight adjustments in the Federal Reserve's monetary policy. Without discussing the long-term prospect of interest rate cuts, in terms of liquidity, the Federal Reserve has already decided to initiate RMP (Reserve Management Purchases) at the December 2025 meeting: essentially, this is the Federal Reserve's correction of previous excessive balance sheet reduction. Unlike interest rate tools, the time frame for the Federal Reserve's quantitative easing/tightening framework is relatively short, and it may be more trial-and-error based on the performance of the money market, which means that quantitative tightening is likely to "overshoot," potentially leading to a tightening of the money market (for example, the turmoil in the U.S. money market in October 2025), and then through phased balance sheet expansion to "fine-tune" an appropriate balance sheet size, which can be through QE (quantitative easing) or RMP (Reserve Management Purchases)—the latter being the measure confirmed by the Federal Reserve at the December meeting last year.

This means that at least from January to April this year, the Federal Reserve will return to balance sheet expansion, and liquidity will improve. How large will it be? According to the Federal Reserve's survey, the basic expected scale is a net purchase of $220 billion within the next 12 months (equivalent to a balance sheet expansion of $220 billion) How is the rhythm? We expect purchases to be concentrated from January to April, followed by a significant slowdown. How to assess? The absolute scale of expansion cannot be overestimated; we expect the average monthly purchase scale from January to April to be around $40 billion (some months will be more). This level is both lower than the average monthly purchase of over $100 billion during QE in 2021 and does not compare to the scale of over $360 billion in single-month balance sheet expansion following the bankruptcy of Silicon Valley Bank in March 2023. However, the potential impact should not be underestimated, mainly reflected in two aspects:

On one hand, based on historical experience and rhythm, from January to early April this year, the U.S. Treasury's TGA account may release over $390 billion in liquidity, especially considering that due to the government shutdown in the fourth quarter of last year, the current (early January) balance of the U.S. TGA is the highest for the same period since 2021 (with significant room for release). Coupled with asset-side expansion, it is expected to increase liquidity by at least $600 billion in the short term (asset side $220 billion + TGA release of over $390 billion).

On the other hand, and perhaps more importantly, is the return of base liquidity (bank reserve balances) to a comfortable scale for the market. Reviewing liquidity and the market since 2020, $3 trillion seems to be a "red line" for base liquidity: the first breach occurred from late 2022 to early 2023, resulting in the bankruptcy of Silicon Valley Bank in March 2023. The second touchpoint was in early May last year, coinciding with the impact of reciprocal tariffs, until late September last year when U.S. base liquidity again fell below the $3 trillion mark (as of January 2 this year, it was $2.85 trillion). This led to increased volatility in the U.S. money market, with the Federal Reserve frequently using temporary tools like repos to supplement liquidity, ultimately having to activate RMP. Through the above analysis, we believe that it is highly probable that U.S. base liquidity will return to a comfortable range for the market in the first quarter of this year.

Finally, the market's "big" expectations for easing will become an important source of market volatility this year. Similarly, in terms of fiscal and monetary aspects, the market still has high expectations for significant fiscal efforts from developed countries led by the U.S., such as the "fantasy" of fiscal measures in an election year: in addition to tax cuts, the White House may also use funds to distribute money to residents. However, given the governance characteristics of Trump 2.0 and legislative procedural obstacles, we are cautious about the implementation and effects of unconventional policies like "money distribution plans."

The monetary aspect is similar. On one hand, the market still expects unexpected interest rate cuts (more than twice) or even a restart of QE (which may be reflected in some precious metals and other assets); on the other hand, based on the expectation that the U.S. will be more accommodative than other major economies (Europe, Japan), it is a basic consensus that the dollar may continue to depreciate this year, but continued depreciation does not mean it will always depreciate.

Based on the above analysis, returning to the complex relationship between liquidity and global assets, we believe that the macro rhythm of the market this year should be analyzed from two "links": one is the degree of easing by the Federal Reserve, and the other is the strength of the dollar index We can make a basic classification:

① "Federal Reserve liquidity easing + dollar depreciation." This is the "ideal scenario" for global assets and may also be an important foundation for the broad market rise since the beginning of the year.

② "Federal Reserve easing + dollar appreciation." Under this combination, it may be more favorable for dollar assets, while some non-dollar assets may come under pressure (possibly due to issues in non-dollar economies). Notably, in 2025, this scenario appeared, and commodities like precious metals performed well, such as in October.

③ "Federal Reserve tightening/easing not meeting expectations + dollar depreciation." Relatively speaking, this may be more favorable for non-dollar assets. For example, in the second quarter of 2025, amid concerns of stagflation, the dollar depreciated, and Hong Kong stocks, A-shares, and commodities all performed well (with stagflation risks emerging in the U.S.).

④ "Federal Reserve tightening/easing not meeting expectations + dollar appreciation." This is the least ideal scenario, where risk assets may face broad pressure, such as for most of 2022 (liquidity tightening). For this year's assets, our analysis mainly revolves around two lines: first, when will the capital expenditure of future industries marked by AI show signs of slowing down; second, the possible switching of the aforementioned liquidity combinations:

First, of course, we should fully enjoy the current "ideal scenario" (lacking important economic data, performance gap period).

Second, in the short term, we should be wary of risks. The hidden danger is that the current weak dollar is mainly based on expectations of easing differences, and there is still a lack of clearer evidence to prove that non-dollar economies are leading the U.S. (such as last year's DeepSeek moment). Recently, the dollar has seen limited declines under disappointing economic data.

Third, there needs to be an increase in concerns about U.S. stagflation. For example, a further rise in unemployment rates and continuous inflation exceeding expectations, which will take time to verify.

Fourth, the probability of this occurring in at least the first three quarters of this year is relatively low, and even if it occurs, the duration will be relatively short. This is because the overall tone remains broadly accommodative, and the issue lies only in the correction of excessive expectations. Currently, the market does not have high expectations for a rate cut in January, with a baseline expectation of two rate cuts within the year.

Risk Warning and Disclaimer

The market has risks, and investment requires caution. This article does not constitute personal investment advice and does not take into account individual users' specific investment goals, financial situations, or needs. Users should consider whether any opinions, views, or conclusions in this article align with their specific circumstances. Investment based on this is at their own risk