Founder of Antler Capital

Stanley Tsai, CFA

Macroeconomics

<ul>
<li>In the absence of an outright LPR cut later this month, the latest RRR move's impact on the real economy may be rather modest. </li>
<li>Assuming CNY500bn of MLFs will be withdrawn in the coming months, the net injection this time around is CNY700bn, about 40% of an average month's new loans.</li>
<li>We would watch out for a potential bubble in the onshore credit market before incremental liquidity benefits the broader economy.</li>
</ul>


In the absence of an outright LPR cut later this month, the latest RRR move's impact on the real economy may be rather modest. 
Assuming CNY500bn of MLFs will be withdrawn in the coming months, the net injection this time around is CNY700bn, about 40% of an average month's new loans.
We would watch out for a potential bubble in the onshore credit market before incremental liquidity benefits the broader economy.


China Macro: RRR Cuts' Diminishing Impact

Head of Research and Global Chief Strategist, Steno Research

Andreas Steno

Head of Research and Global Chief Strategist

Macro and Geopolitical Research House

Steno Research

Steno Research is a new macro and geopolitical research house. We are based out of Copenhagen, Denmark, but have an international team and a strong network of sources and partners around the world. The team is lead by Andreas Steno, previous global head of strategy at Nordea Bank, and Mikkel Rosenvold, former chief consultant in the Danish Ministry of Finance.

Cross Asset Strategy

<ul><li>Hello everyone, and welcome back to our weekly positioning watch.</li><li>The debates about whether the US is heading for a recession are still touring the charts, as the labor market and other economic data soften back towards pre-pandemic levels.</li><li>However, while some might be uncomfortable watching the US economy slow more than anticipated, the lack of ringing alarm bells and Powell’s recent victory lap on inflation have greenlighted markets to price in a soft landing as a 95-99% probability event by now when looking across positioning data.</li></ul>

Hello everyone, and welcome back to our weekly positioning watch.The debates about whether the US is heading for a recession are still touring the charts, as the labor market and other economic data soften back towards pre-pandemic levels.However, while some might be uncomfortable watching the US economy slow more than anticipated, the lack of ringing alarm bells and Powell’s recent victory lap on inflation have greenlighted markets to price in a soft landing as a 95-99% probability event by now when looking across positioning data.

Positioning Watch – The Soft Landing Is Moving Towards a Recovery Trade

Geopolitical Analyst, Steno Research, Steno Research

Mikkel Rosenvold

Geopolitical Analyst, Steno Research

<ul><li>We cover the Trump assassination attempt in other spaces, so in this we’ll focus on the political fallout and touch upon other relevant topics, including the Chinese Policy Plenary.</li><li>Firstly some thought on Trump picking J.D. Vance as his running mate.</li><li>As a staunch Trump supporter, Vance represents a more grassroots, anti-establishment figure compared to others like Nikki Haley.</li></ul>

We cover the Trump assassination attempt in other spaces, so in this we’ll focus on the political fallout and touch upon other relevant topics, including the Chinese Policy Plenary.Firstly some thought on Trump picking J.D. Vance as his running mate.As a staunch Trump supporter, Vance represents a more grassroots, anti-establishment figure compared to others like Nikki Haley.

Great Game – Trump: Election or Coronation?

Podcast by Joe Weisenthal & Tracy Alloway, Odd Lots

Odd Lots

Podcast by Joe Weisenthal & Tracy Alloway

Bloomberg's Joe Weisenthal and Tracy Alloway explore the most interesting topics in finance, markets and economics. Join the conversation every Monday and Thursday.

<ul><li>Odd Lots podcast discusses trade tensions between the US and China, drawing parallels to past trade conflicts with Japan</li><li>Pop culture references and historical anecdotes provide context for current trade disputes</li><li>Guest Stephen Roach, a senior fellow at Yale Law School and former chairman of Morgan Stanley Asia, offers insights on the errors of current approach to China</li></ul>This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

Odd Lots podcast discusses trade tensions between the US and China, drawing parallels to past trade conflicts with JapanPop culture references and historical anecdotes provide context for current trade disputesGuest Stephen Roach, a senior fellow at Yale Law School and former chairman of Morgan Stanley Asia, offers insights on the errors of current approach to ChinaThis content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

Stephen Roach Warns of Disaster From Our 'Sinophobic' China Policy

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

<ul>
<li>The review cutoff date for the September rebalance of the HSIII was 28 June. The changes will be announced on 16 August and become effective after the close 6 September.</li>
<li>There could be 3 changes to the index with some inclusions driven by potential addition to the Hang Seng Composite Index. That could lead to buying via Southbound Stock Connect.</li>
<li>Capping will result in passives buying <a href="https://www.smartkarma.com/entities/kuaishou-technology" target="_blank" data-smartkarma-citation="entities:29725:1" rel="noopener">Kuaishou Technology (1024 HK)</a> and <a href="https://www.smartkarma.com/entities/jd-com-inc" target="_blank" data-smartkarma-citation="entities:29043:1" rel="noopener">JD.com (9618 HK)</a> while selling <a href="https://www.smartkarma.com/entities/meituan" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a> and <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a>.</li>
</ul>


The review cutoff date for the September rebalance of the HSIII was 28 June. The changes will be announced on 16 August and become effective after the close 6 September.
There could be 3 changes to the index with some inclusions driven by potential addition to the Hang Seng Composite Index. That could lead to buying via Southbound Stock Connect.
Capping will result in passives buying Kuaishou Technology (1024 HK) and JD.com (9618 HK) while selling Meituan (3690 HK) and Tencent (700 HK).


Hang Seng Internet & IT Index (HSIII) Rebalance Preview: Three Adds/Deletes & Capping Changes

Hong Kong

The Hang Seng Index is a free-float capitalization-weighted index of a selection of companies from the Stock Exchange of Hong Kong. The components of the index are divided into four subindices: Commerce and Industry, Finance, Utilities, and Properties. The index was developed with a base level of 100 as of July 31, 1964.

Hang Seng Index (HSI INDEX)

China Macro: RRR Cuts' Diminishing Impact

In the absence of an LPR cut, the impact of the latest RRR move may be limited. We estimate that net of MLF maturities, the liquidity boost is...

Stanley Tsai, CFA

Positioning Watch – The Soft Landing Is Moving Towards a Recovery Trade

Overall positioning and sentiment indicators are starting to diverge, though. Most indicators show continued support for risk assets in H2.

Steno Research

Great Game – Trump: Election or Coronation?

Welcome to this week’s Great Game after an incredible weekend. We also cover the Trump assasination attempt in other spaces, so in this we’ll...

Steno Research

Stephen Roach Warns of Disaster From Our 'Sinophobic' China Policy

The Odd Lots podcast examines US trade tensions with China by comparing them to past trade tensions with Japan in the 1980s, discussing the...

Odd Lots

Hang Seng Internet & IT Index (HSIII) Rebalance Preview: Three Adds/Deletes & Capping Changes

There could be 3 changes for the HSIII in September. The passive buying on the adds is small while selling on the deletes is much larger. Lock-up...

Brian Freitas