Quiet disengagement

Foreign appetite for US assets is drying up. As Deutsche Bank's latest data shows, net buying of both US bonds and equities by foreign-domiciled funds has collapsed to near zero.

With persistent US twin deficits and growing uncertainty, global investors are simply not showing up.

That matters. As Deutsche Bank points out, this could mean further weakening of the USD and a steeper yield curve, as fewer foreign buyers or demand for long term treasuries could push long-term rates higher while the Fed holds the short end steady.

At ECP, we are not macro investors and stay grounded in company fundamentals — investing in companies with strong cash flows, solid balance sheets, and valuations that leave room for upside, wherever they may be. There remain investment opportunities in the US.