In today’s briefing:
- Litigation Funding as an Asset Class
- Unpacking Crude Oil IV Behaviour During OPEC Meetings
- China Real Estate: Continued Fund Rotation Drives New Lows
- CX Daily: It’s Curtains for China’s Local Financial Asset Exchanges
- Ifo Watch – Is Germany rebounding against all odds?
Litigation Funding as an Asset Class
- Litigation funding offers third-party financing for lawsuits in exchange for a share of the settlement or judgment.
- It has emerged as an attractive asset class due to high returns and diversification benefits.
- The market is driven by institutional involvement, technological advancements, and the rise of ESG litigation.
Unpacking Crude Oil IV Behaviour During OPEC Meetings
- OPEC’s 12-members command 40% of the world’s crude production. Combine that with Russia and its allies, the OPEC+ represents three-fifths of global oil production.
- Although chances of OPEC+ keeping its supply cuts intact remain high, negotiations between the members are expected to be rocky.
- On average, IV eases as the meeting approaches. Post-meeting, IV shrinks further. IV averaging hides extreme moves. Observations over the last 19 meetings exhibit a standard deviation of 10%.
China Real Estate: Continued Fund Rotation Drives New Lows
- Record Low Allocations: Real Estate holdings in active China equity funds have plummeted to a new low of 2.51%, with only 76.4% of funds maintaining any position.
- Recent Fund Rotation: Closures by key investors and a downturn in ownership metrics since October last year highlight the sector’s declining appeal.
- KE Holdings Exception: Amidst the decline, KE Holdings (2423 HK) stands out, achieving an all-time high in fund ownership.
CX Daily: It’s Curtains for China’s Local Financial Asset Exchanges
- Exchanges / In Depth: It’s curtains for China’s local financial asset exchanges
- Biotech /Caixin Explains: How China is overhauling regulations on genetic resources
- Cyberbully /: Public security official loses lawsuit for online attacks on murdered couple’s daughters
Ifo Watch – Is Germany rebounding against all odds?
- The nationwide figure was released today at 14.00 CET, and despite headline CPI surprising a tad dovish compared to consensus of 0.2% MoM, we had the right lean on overall price pressures with rates markets clearly viewing the report as hawkish news with the longer end of the yield curve selling off.
- In general regional figures showed a slight dovish surprise in headline terms, which is de facto the mandate of the ECB, but core prices and key components of the HICP basket were not a pleasant surprise for policymakers, which will likely weigh on the rhetoric from ECB in their June meeting.
- Notably we saw a slight hawkish surprise in the HICP figure compared to CPI, as the categories recreation and culture and restaurants and hotels weigh relatively more in HICP compared to CPI, while food prices weigh less.
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