Daily Brief Macro: China Watch: Time to play briefing bingo again.. and more

• Welcome to our China Watch series, where we look at the Chinese case through the lens of Western investors.
• Tomorrow, we will have another briefing aimed at boosting the property market, which is one of those tricky conundrums to deal with.
• Housing starts have already dropped back 20 years, and the value of unsold homes and projects is sky-high.

• Representatives of all relevant major Ministries showed up and had their say
• As is now usual from these events some positives as well as some disappointment
• Further steps taken to put a floor under the property market

• Stock market dominated by big tech companies, increasing importance of tech companies in equity market
• S&P 500 becoming more like the Nasdaq due to tech dominance
• Tech companies moving towards project-based financing and increasing interest in credit market, with potential for substantial returns in opportunistic credit opportunities

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• Healthcare sector continues to gain momentum in Hong Kong market during pullback with materials and energy sectors lagging.
• Value and Liquidity factors have outperformed since stimulus announcement in September.
• Anta Sports Products (2020 HK) , JD Health International (6618 HK) and Sands China (1928 HK) were rated as BUY as analysts turn toward China consumption plays as future winners.

• Observed significant economic activity at Tattersalls horse sales despite lower UK inflation, suggesting stable interest rates.
• Several Asian countries, excluding Indonesia, implemented interest rate cuts, showing varied economic responses.
• China’s gradual easing aligns with expectations, while Vietnam’s surprising GDP growth raises questions about statistical accuracy.

• BRICS can provide a political buffer but not economic, as BRICS are still searching for practical areas for cooperation.  
• However, Donald Trump universal tariffs threats could focus BRICS on more intra EM trade.
• BRI has already helped to redirect China exports to EM countries, despite the slowdown in new lending to BRI countries. 

• Euro area headline and services inflation were trimmed in the final prints for October, reinforcing the disinflationary imperative in the ECB’s decision to cut rates again.
• The news on underlying inflation was mixed between countries and measures. Things broadly remain close to target-consistent levels but need not stay like that.
• We remain concerned about potential over-extrapolation and focus on disinflationary data points, although that seems unlikely to change in time to block a December cut.

• Surprisingly steep disinflation and drops in the PMIs shocked expectations for the ECB’s October meeting, which were matched by the realised 25bp rate cut.
• The coherent story of disappointment magnified the strength of the signal enough for the ECB to act. Much more data will be available by the December decision.
• No commitments were made to act or not, but the hurdle is lower with a forecast to communicate the totality of the news. We expect a cut then before the pace slows.

• Short-term 20-day MA remained elevated through September to mid-October 2024  
• SIR20 traded at a discount to futures  
• Processors in Thailand and Indonesia faced more margin pressure due to high raw material costs  
• The forward curve shows October 2024 prices at their highest for the year

• Energy / Caixin Explains: The power grid’s solar and wind problem
• Korean Peninsula /Analysis: How tensions on the Korean Peninsula exploded with the loss of two symbolic links
• Payments /: UnionPay teams up with Vietnam partner to boost cross-border QR payments