Chief Economist

Diana Choyleva

Enodo Economics

Enodo Economics is an independent macroeconomic forecasting company that untangles complexity, challenges the consensus, and makes sense of the future. Our focus is on China – one of the most misunderstood economies in the world, but one of the most important to figure out.  Enodo’s chief economist, Diana Choyleva, has been analysing China for almost 20 years, while Enodo’s team boasts a combined 140 years’ experience covering China’s economy, politics and markets. 

Macroeconomics

<h2>China News That Matters</h2><ul><li>MSCI adds a small slice of China to its main equity indexes</li><li>Trump cancels death sentence on <a href="https://www.smartkarma.com/entities/6922" target="_blank" data-smartkarma-citation="entities:6922:1">Zte Corp H (763 HK)</a> as a favour to Xi</li><li>The PBoC tugs furiously at its monetary levers</li><li>Li Keqiang’s Tokyo charm offensive</li><li>The dark side of technology: the rapid rollout of China’s “social credit” scheme</li></ul><div class="content-remarks">In my weekly digest China News That Matters, I will give you selected summaries, sourced from a variety of local Chinese-language and international news outlets, and highlight why I think the news is significant. These posts are meant to neither be bullish nor bearish, but help you separate the signal from the noise.</div>

China News That MattersMSCI adds a small slice of China to its main equity indexesTrump cancels death sentence on Zte Corp H (763 HK) as a favour to XiThe PBoC tugs furiously at its monetary leversLi Keqiang’s Tokyo charm offensiveThe dark side of technology: the rapid rollout of China’s “social credit” schemeIn my weekly digest China News That Matters, I will give you selected summaries, sourced from a variety of local Chinese-language and international news outlets, and highlight why I think the news is significant. These posts are meant to neither be bullish nor bearish, but help you separate the signal from the noise.

China MSCI/ZTE/PBoC/Japan Ties/Technology Push

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

MSCI Emerging Markets Index / Technical Analysis

Recent USD strength has weighed on EM’s relative performance. Given (1) strength in commodity prices (sans precious metals), (2) the potential for some backing-and-filling of the USD, and (3) MSCI EM price and relative strength support levels continuing to hold, we see recent weakness as a buying opportunity.  The MSCI BRIC index has reasserted its leadership status. In addition to China, fellow BRIC countries Brazil and India exhibit attractive setups, while Chile’sIPSA also presents opportunities. Today’s report includes a wide variety of bottom-up recommendations across the EM universe, spanning most sectors and all market capitalizations.

Recent USD strength has weighed on EM’s relative performance. Given (1) strength in commodity prices (sans precious metals), (2) the potential for some backing-and-filling of the USD, and (3) MSCI EM price and relative strength support levels continuing to hold, we see recent weakness as a buying opportunity.  The MSCI BRIC index has reasserted its leadership status. In addition to China, fellow BRIC countries Brazil and India exhibit attractive setups, while Chile’sIPSA also presents opportunities. Today’s report includes a wide variety of bottom-up recommendations across the EM universe, spanning most sectors and all market capitalizations.

Emerging Markets Strategy: Attractive Setups in China, Brazil, India, and Chile

Managing Director, MTS Research

Peter Beuttell

Managing Director

MTS Research

MTS Research Limited is an independent investment research company specialising in technical analysis. 

MTS Research provides technical analysis services in the form of regular publications and consultancy advice, catering for a number of different investment approaches from absolute or relative returns to long-only and long/short.  The company has a global client base of blue-chip financial institutions ranging in size and stretching from Los Angeles to Tokyo, via New York, London, Frankfurt and Hong Kong.  

MTS was founded in 1989 at the request of Morgan Grenfell Investment Services Limited (MGIS), the ERISA arm of Morgan Grenfell Asset Management (subsequently Deutsche Asset Management), by Peter Beuttell, a Portfolio Manager at MGIS between 1987 and 1989. 

Peter is a qualified Chartered Accountant and self-taught market technician with over 30 years experience.  At MGIS, Peter managed money in European, Australasian and Far East markets for US clients, such as American Airlines and American Petrofina.  He achieved first quartile perfomance on their behalf by blending fundamental and technical analysis in his investment decision-making.  

After an initial focus on the EAFE markets (Europe, Australasia and Far East), the company has recently expanded its coverage to include the Americas, thanks to the recently-completed two-year Knowledge Transfer Partnership with the University of Plymouth.  The resulting software – the Technical Overlay Program (TOP) – allows fund managers to access an immediate Technical view on any market, sector, stock, bond yield, currency or commodity within their selected universe.

MTS Research consists of a team of five based in Penzance and London. 

A confirmed 200-day moving average buy signal has been triggered in MSCI GEM on the recent new correction lows.  Asia Pacific ex Japan has not been quite as weak, so its buy signal is more muted, but both are now rated Bottom-Fishing Buy. We view these as only trading recommendations, given the late stage in the post-2016 uptrend, and, if the US fails to signal a final run, we would tighten stops or exit.

A confirmed 200-day moving average buy signal has been triggered in MSCI GEM on the recent new correction lows.  Asia Pacific ex Japan has not been quite as weak, so its buy signal is more muted, but both are now rated Bottom-Fishing Buy. We view these as only trading recommendations, given the late stage in the post-2016 uptrend, and, if the US fails to signal a final run, we would tighten stops or exit. 

Emerging Markets: Trading Buy Signal Given

Chief Economist & Political Strategist, CrossASEAN Research

Prasenjit K. Basu

Chief Economist & Political Strategist

REAL-Economics.com

FOMC is likely to be concerned by the clear upward spurt in core inflation. The FOMC (Federal Open Market Committee) is meeting hot on the heels of most inflation gauges breaching the Fed's oft-stated inflation target of 2% YoY. While the Fed has formally targeted the core PCE deflator, it also pays attention to the headline PCE deflator. The latter breached the 2% mark in March 2018 (rising by 2.01% YoY), while the core PCE deflator rose 1.9% (1.88% to be precise) YoY in March 2018, getting…

FOMC is likely to be concerned by the clear upward spurt in core inflation. The FOMC (Federal Open Market Committee) is meeting hot on the heels of most inflation gauges breaching the Fed's oft-stated inflation target of 2% YoY. While the Fed has formally targeted the core PCE deflator, it also pays attention to the headline PCE deflator. The latter breached the 2% mark in March 2018 (rising by 2.01% YoY), while the core PCE deflator rose 1.9% (1.88% to be precise) YoY in March 2018, getting…

With the Inflation Target Breached, Can the Fed Postpone Signalling Faster Rate Hikes?

EM equities remain long-term leadership despite giving up some ground over the last month to developed markets. Given the intact relative strength uptrend, we reiterate our overweight EM recommendation. Energy and Health Care stocks are outperforming and remain attractive. Technology is consolidating and we would use recent weakness as a buying opportunity. Today’s report includes a wide variety of bottom-up recommendations, spanning most sectors and all market capitalizations.

EM equities remain long-term leadership despite giving up some ground over the last month to developed markets. Given the intact relative strength uptrend, we reiterate our overweight EM recommendation. Energy and Health Care stocks are outperforming and remain attractive. Technology is consolidating and we would use recent weakness as a buying opportunity. Today’s report includes a wide variety of bottom-up recommendations, spanning most sectors and all market capitalizations.

EM Strategy: Overweight Technology, Energy, and Health Care.

China

The MSCI Em (Emerging Markets) Index is a free-float weighted equity index that captures large and mid cap representation across Emerging Markets (EM) countries. The index covers approximately 85% of the free float-adjusted market capitalization in each country.

MSCI Emerging Markets Index (MXEF INDEX)

China MSCI/ZTE/PBoC/Japan Ties/Technology Push

China News That Matters MSCI adds a small slice of China to its main equity indexes Trump cancels death sentence on Zte Corp H (763 HK) as a favour...

Diana Choyleva

Emerging Markets Strategy: Attractive Setups in China, Brazil, India, and Chile

Recent USD strength has weighed on EM’s relative performance. Given (1) strength in commodity prices (sans precious metals), (2) the potential for...

Vermilion Research

Emerging Markets: Trading Buy Signal Given

A confirmed 200-day moving average buy signal has been triggered in MSCI GEM on the recent new correction lows. Asia Pacific ex Japan has not been...

Peter Beuttell

With the Inflation Target Breached, Can the Fed Postpone Signalling Faster Rate Hikes?

FOMC is likely to be concerned by the clear upward spurt in core inflation. The FOMC (Federal Open Market Committee) is meeting hot on the heels of...

Prasenjit K. Basu

EM Strategy: Overweight Technology, Energy, and Health Care.

EM equities remain long-term leadership despite giving up some ground over the last month to developed markets. Given the intact relative strength...

Vermilion Research