Dollarisation waves: BIS IDS data
International debt securities demand patterns challenge assumptions about enduring de-dollarisation and hint at intricate currency dynamics in global finance.
The BIS IDS dataset shows outstanding IDS rising from about $2 billion in 1970 to roughly $30 trillion by end-2024. The dollar’s share has moved in waves since 2000, from around 60% in the early 2000s to about 43% in 2008, back to around 60% in the late 2010s, and sitting near the 2000 level in 2024. The euro’s share rose from roughly 15% in 2000 to about 30% by 2008 and remained well above its 2000 level thereafter. The renminbi’s share, while still smaller, grew gradually, with continued notable dynamics shaping currency denomination.
These patterns imply that the dollar dominance is not a straightforward upward trajectory but rather a cyclical phenomenon. The study notes that exchange rate movements help explain some swings, though even after adjusting for exchange rates the wavelike pattern persists. The euro’s moment during the earlier euro era appears especially salient, when new issuances of euro-denominated IDS nearly rivalled dollar-denominated issuance before the Global Crisis.
Determinants of denomination include currency zone alignment, domestic interest rates, and geopolitical tensions. Countries whose currencies track closely with a major reserve currency issue more debt in that currency, while higher domestic rates push borrowing into dollars and higher US rates have the reverse effect. The authors caution that these dynamics interact with geopolitical risk, with public sector borrowers more exposed than private firms to shifts in currency denomination.
The takeaway for policymakers and markets is nuanced: the dollar’s dominance remains influential, but de-dollarisation narratives may overstate structural shifts. The data suggest a complex, wave-like pattern rather than a secular trend toward a multi-polar reserve architecture.
Markets where investors should buy the dip
Fund managers point to Japan, Korea and emerging markets as potential near-term rebound zones after shocks linked to the Iran conflict.
Trustnet canvassed fund managers on where to look for relief after volatility triggered by the Iran war shocks. The mood is cautious on timing and volatility, with a notable consensus that both long-er-term value and some near-term upside may emerge in Japan, Korea and broader emerging markets as macro risks ease.
Japan’s Topix has shown resilience with selective sectors offering improved valuation alongside domestic demand and wage growth. Governance reforms and a stabilising domestic backdrop are cited as supportive for selective exposure, particularly among domestically oriented, cash-rich families of stocks. In Korea, ongoing reforms and valuations remain attractive to some managers even as energy price sensitivities complicate near-term earnings, given the region’s sensitivities to global energy moves.
Emerging markets feature a balance of longer-run structural drivers-demographics, energy diversification and stronger balance sheets-against near-term volatility. Several managers recommend patience and a measured entry approach, highlighting the opportunity to deploy capital gradually as volatility abates and as policy responses become clearer. A few caution that not all regions will recover in tandem, with dispersion in performance likely across markets tied to energy exposure and domestically oriented growth.
Three trusts enter AICs next generation of dividend heroes
High and stable income continues to attract investor demand, with infrastructure and emerging market assets joining the Dividend Heroes list.
The Association of Investment Companies has added Foresight Environmental Infrastructure, Utilico Emerging Markets and Diverse Income Trust to its next generation of Dividend Heroes, continuing a tradition of trusts that have increased payouts for between 10 and 20 years. Foresight Environmental Infrastructure has a high dividend yield and a track record of annual growth, with a mission around private infrastructure assets and decarbonisation. Utilico Emerging Markets focuses on infrastructure and utilities in developing economies, offering a more diversified income stream. Diverse Income Trust broadens exposure to various income-generating assets.
The roster signals ongoing demand for diversified, income-producing holdings across infrastructure and emerging markets. Managers emphasise the stabilising properties of cash flow and regulatory frameworks that support predictable dividends, even in volatile markets. Quarterly dividend updates and roster changes will be closely watched as the sector rebalances around shifting inflation expectations and policy directions.
GAM managers slam Liontrust for destruction of value
GAM funds urge a strategic review at Liontrust after an 85% share price fall since 2021 and a halving of AUM, prompting questions about governance and strategic direction.
GAM Global Opportunities Fund and GAM Global Special Situations Fund have called on Liontrust to initiate a strategic review, including potential sale options. The criticism follows a period in which Liontrust’s shares declined sharply and assets under management have contracted. The dispute raises questions about whether Liontrust may pursue strategic pivots, governance changes or new asset allocations to restore investor confidence.
Market watchers will be watching how Liontrust responds, whether a formal strategic discussion is announced, and how any such development might affect the stock’s performance and broader sentiment toward equity income funds in the sector.
The dynamic underscores how governance and strategic clarity can become focal points in periods of volatility, especially when investor appetite for income-focused strategies remains robust but selective.
Oil Prices Spike as Iran Denies U.S. Talks
Oil markets reprice risk amid renewed tensions, with a fast reply in price through Hormuz risk and flows indicators.
Oil has surged with WTI around 91.54 dollars per barrel and Brent around 103.40 dollars as Iran denies ongoing negotiations. The denial, following a period of de-escalation chatter, has sharpened focus on Hormuz related supply routes and the risk premium surrounding regional infrastructure. Traders say the near-term path depends on flow data and the trajectory of sanctions and diplomatic signals.
Analysts note that the disruption narrative remains viable should tensions persist or escalate again, with the potential for inflationary spillovers if supply tightness becomes persistent. Watchers emphasise monitoring Hormuz flows, sanctions relief signals and IE A infrastructure assessments to gauge the resilience of supply chains and the policy response.
Chinese Publication Claims U.S. Has Two Months of Rare Earths Left
Supply chain bottlenecks in rare earths push North America to accelerate domestic metallisation and magnet capacity.
A pair of reports in Chinese and Western media argue that U S rare earth inventories for defence could fall within months, amid sanctions risks and supply chain realignment. REalloys, a North American supplier, is advancing metallisation capacity in Europe and the United States, including Euclid, Ohio, to produce magnet alloys domestically. The push aims to reduce dependence on Chinese processing stages as a 2027 magnet origin ban nears.
The narrative highlights the strategic importance of securing rare earths for defence and energy technologies, potentially accelerating policy action and investment in North American supply chains. Observers will watch REalloys’ output milestones, including the Euclid plant’s progress and the status of other regional projects, as well as policy developments around magnet supply timelines.
Middle East Chaos Hands Canada a 65 Billion Gift
Lower energy prices and higher export potential could reshape Canada’s fiscal outlook and energy strategy.
Enverus modelling suggests that a rally to around $90 a barrel could lift Canadian oil revenues by roughly C$90 billion in a year, potentially erasing a deficit of about $10 billion if export capacity expands. Realisation of this scenario depends on pipeline capacity, export infrastructure, and regulatory reform momentum.
Analysts say the development would reinforce the case for pipeline diversification and strategic storage and could influence energy policy for the coming year. Watch oil price trajectories, progress on Trans Mountain expansion, and the broader regulatory agenda intended to unlock export capacity.
Aramco CEO Withdraws From Houston Event
Amin Nasser’s absence at CERAWeek signals how war risks and export route shifts affect leadership messaging at major gatherings.
Amin Nasser pulled out of a high-profile CERAWeek appearance in Houston amid Middle East volatility as Saudi Aramco and ADNOC adjust to war risks and evolving export routes. The absence underscores how geopolitical risk can shape attendance and messaging at key industry conferences, with potential signalling effects for investors and partner ecosystems.
Observers will watch for any updates on production decisions by Saudi and UAE authorities, Hormuz related guidance, and flow indicators that might inform market expectations about near-term energy supply and pricing dynamics.
Oil Futures Crash on Trump Negotiations Hint
Diplomacy headlines drive near-term energy price volatility.
Oil futures fell sharply after Trump signalled negotiations toward ending the war, with Brent and WTI swinging as markets recalibrated to possible de-escalation. The episode illustrates how diplomacy news can dominate price action in the short run, even when fundamentals remain unsettled.
Markets will continue to track any new diplomatic signals, Hormuz flow status, and central bank responses to energy price volatility as observers assess the staying power of any price moves that follow such headlines.
Trump Delays Iran Energy Strikes as Confusion Swirls
Five-day pause signals fragile de-escalation dynamics amid ongoing talks and market reaction.
Trump said strikes on Iranian energy infrastructure would be postponed for five days after what he characterised as constructive talks, sending Brent around $96 and triggering mixed market readings about lasting de-escalation prospects. The episode emphasises how fragile the security of energy markets can be when political signals shift, with spillovers into inflation expectations and policy responses.
Analysts say watchers should gauge statements on Hormuz, the status of talks, and price re-pricing in oil and gas markets as the situation evolves.
Two Indian LPG Ships Transit Hormuz
India maintains energy security through Hormuz transit amid regional disruption.
Two Indian flagged LPG carriers transited the Strait of Hormuz, reflecting India’s ongoing energy security posture as the region grapples with disruption and safety arrangements. The development highlights the strategic role transit nations can play in preserving energy supply lines amid geopolitical volatility.
Markets will monitor further Hormuz transits, LPG delivery schedules and any policy responses designed to safeguard regional energy security.
Seed Story: Important Announcement: Gold is not for quick flips
Market sentiment shifts toward long-term holding in precious metals during volatility.
A post emphasising that gold is not suitable for short-term speculation but belongs in a long-term strategy has circulated on social platforms. The message appears in a moment of heightened market stress as investors reassess risk appetite and hedging strategies.
The conversation signals a potential reorientation among investors and could influence entry points for gold holdings as part of diversified portfolios.