In today’s briefing:
- China Property – First Signs Of Improvement In Some Cities (Weekly New Home Sales To Sep 24)
- CRE Debt Watch: The initiator or magnifier of financial crises
- EA Slowdown Exaggerated in Summers
- CX Daily: WHO’s New China Rep Says Tighten Disease Surveillance
- EM by EM #23 Playing the Least Dirty Laundry Vs the Dirtiest
- Out of the Box #20: Gas and Steepeners Brought to You by Muftis and Tsars
China Property – First Signs Of Improvement In Some Cities (Weekly New Home Sales To Sep 24)
- Weekly new home sales for a group of 15 major cities to the week ending Sep 24, continue to show deterioration in aggregate (YTD y/y, 4-week y/y, 52-week y/y)
- But some cities, including Beijing and Shanghai, saw a jump in new home sales reported for the last week (based on the underlying data from CREIS)
- This is likely the first signs of impact from the latest policy easing measures that now start showing in the data
CRE Debt Watch: The initiator or magnifier of financial crises
- Historically, commercial real estate firms have posed significant risks to the financial system because of funding vulnerabilities and their impact on the broader economy.
- Issues in the CRE market have often initiated or magnified financial crises.
- This is largely because the CRE sector, being debt-financed and closely tied to the financial system, is sensitive to financial cycles.
EA Slowdown Exaggerated in Summers
- PMIs place the Euro area as the global epicentre of current weakness, which is as bad as last year. Similarity may not be a coincidence: the trough may be imminent.
- 2020’s crash appears to be polluting the seasonal adjustment of many datasets. The ESI fell less in lockdown and looks less distorted. Indeed, it has proven resilient recently.
- Monetary policy should be more sensitive to unemployment and inflation. We still expect no more ECB rate hikes and a final 25bp step from the BoE in November.
CX Daily: WHO’s New China Rep Says Tighten Disease Surveillance
- WHO /: WHO’s new China Rep says tighten disease surveillance, expand primary care to tackle outbreaks
- Electric cars /: China could resolve EV row with EU by ‘price undertaking’ talks, ex-WTO chief say
- Esports /: China wins first ever esports gold medal at Asian Games
EM by EM #23 Playing the Least Dirty Laundry Vs the Dirtiest
- Lately, we’ve been quite outspoken regarding the imminent threat posed by the USD/Oil dynamics, which has the potential to unleash turmoil within the emerging markets sphere.
- While we typically don’t shy away from challenging prevailing opinions, it appears that, in this specific context, our perspective is slowly becoming the consensus view (which, I might add, is more lucrative than the opposite order).
- But perhaps it is worthwhile to question and assess the fundamental drivers behind the current predicament- and ask what does it take to turn things around?
Out of the Box #20: Gas and Steepeners Brought to You by Muftis and Tsars
- The risk/reward in going long Natural Gas is getting better by the week currently
- The European and Japanese trade surplus/deficit is 100% under the control of energy prices, leaving JPY and EUR vulnerable to such a spike in Nat Gas prices
- We are once again in the hands of Tsars and Muftis this Winter and we better hope that the wind blows..
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