Asia biased macro & technical analysis, Untying The Gordian Knot

Untying The Gordian Knot

Asia biased macro & technical analysis

A differentiated process with a primary focus on Asia. Technical Analysis as core and Macro drivers that could bring the view to fruition & changes that could make the idea fall apart. The objective is to be the best in class, hence corner shop.

Cross Asset Strategy

<ul><li>This is the second of three notes on China's recovery.</li><li>Most, if not all, bullish consumer recovery scenarios have been based on the revenge spending model that analysts witnessed in other parts of the world.</li><li>There is no question that it is human to do things like recreation, shopping, and travel after three years of lockdowns.</li></ul>

This is the second of three notes on China's recovery.Most, if not all, bullish consumer recovery scenarios have been based on the revenge spending model that analysts witnessed in other parts of the world.There is no question that it is human to do things like recreation, shopping, and travel after three years of lockdowns.

Macroeconomics

<ul><li>Until April, China A shares saw sustained Northbound Inflows.</li><li>In January 2023, foreign investors invested a record $100 billion in China A shares.</li><li>This was more than 2022, which was $90 billion. We have started to see some outflows in May, but this is yet to be a trend.</li></ul>

Until April, China A shares saw sustained Northbound Inflows.In January 2023, foreign investors invested a record $100 billion in China A shares.This was more than 2022, which was $90 billion. We have started to see some outflows in May, but this is yet to be a trend.

<ul><li>China's retail sales and industrial production fell short of expectations in April.</li><li>The People's Bank of China (PBOC) has increased long-term liquidity through the medium-term lending facility (MLF).</li><li>The PBOC and the government will likely need to consider implementing monetary and fiscal stimulus to support the economy.</li></ul>

China's retail sales and industrial production fell short of expectations in April.The People's Bank of China (PBOC) has increased long-term liquidity through the medium-term lending facility (MLF).The PBOC and the government will likely need to consider implementing monetary and fiscal stimulus to support the economy.

Ultra-Bond Futures, USDCNY, and Dollar Index

FX & Rates

<ul><li>Friday's market close marked an impulse Dollar reversal pattern (we await confirmation) despite weaker NFP, lower wage growth, and inflation figures.</li><li>The DM currencies were the last to decline against the Dollar, led by Euro and GBP. USDJPY made a low on March 24 and has since made higher lows.</li><li>USDJPY made a low on March 24 and has since made higher lows. Despite the expectations, BoJ will ease the Yield Curve Control policy, leading to higher Yen rates and a stronger Yen.</li></ul>

Friday's market close marked an impulse Dollar reversal pattern (we await confirmation) despite weaker NFP, lower wage growth, and inflation figures.The DM currencies were the last to decline against the Dollar, led by Euro and GBP. USDJPY made a low on March 24 and has since made higher lows.USDJPY made a low on March 24 and has since made higher lows. Despite the expectations, BoJ will ease the Yield Curve Control policy, leading to higher Yen rates and a stronger Yen.

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

Hang Seng China Enterprises Index / Event-Driven

<ul>
<li>The HSCEI 2023 dividend futures have dropped over the last week as results have trickled in and some of the larger dividend payers have cut their final dividends.</li>
<li>Over 50% of the DIPS are confirmed now and that number will increase significantly over the next couple of days as the remaining companies announce their final dividends.</li>
<li>From our estimates, just over 80% of the DIPS will be confirmed by tomorrow though over 66% of the total DIPS will have CNYHKD risk attached to it.</li>
</ul>


The HSCEI 2023 dividend futures have dropped over the last week as results have trickled in and some of the larger dividend payers have cut their final dividends.
Over 50% of the DIPS are confirmed now and that number will increase significantly over the next couple of days as the remaining companies announce their final dividends.
From our estimates, just over 80% of the DIPS will be confirmed by tomorrow though over 66% of the total DIPS will have CNYHKD risk attached to it.


HSCEI Dividend Futures: Nearing the Pointy End of Results Season

China

The Chinese renminbi (yuan) is the official currency of The People's Republic of China. 

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CNY (USDCNY CURNCY)

China Recovery - Households

Most, if not all, bullish consumer recovery scenarios have been based on the revenge spending model that analysts witnessed in other parts of the...

Untying The Gordian Knot

China Recovery – Real Estate

Until April, China A shares saw sustained Northbound Inflows. In January 2023, foreign investors invested a record $100 billion in China A shares.

Untying The Gordian Knot

Ultra-Bond Futures, USDCNY, and Dollar Index

China's retail sales and industrial production fell short of expectations in April. The People's Bank of China (PBOC) has increased long-term...

Untying The Gordian Knot

Things to Watch In Asia Pacific FX

Friday's market close marked an impulse Dollar reversal pattern (we await confirmation) despite weaker NFP, lower wage growth, and inflation figures.

Untying The Gordian Knot

HSCEI Dividend Futures: Nearing the Pointy End of Results Season

Over half of 2023 DIPS are now confirmed & will rise to 80% by close tomorrow. There is FX risk attached to most dividends. The 2023/24 steepener...

Brian Freitas

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