Another day, another loss for chinese stocks.
According to Guotai Junan Futures, there are about 30 billion yuan ($4.2 billion) of snowball derivatives products tied to the CSI 1000 Index are near levels that trigger losses at maturity, according to Guotai Junan Futures Co, as the stock rout in China's stock market pushes the derivatives to near knock-in levels. Another 60 billion yuan of the derivatives are 5%-10% away from their knock-in thresholds! Source: www.zerohedge.com
China’s economy spooks markets, and stocks sink.
The CSI 300 has underperformed the S&P 500 by >40ppts over the year. Source: Bloomberg, HolgerZ
Japanese companies profits are surging
but that's not translating into rising domestic wages, keeping a lid on domestic inflationary pressures, and allowing easy monetary & FX policy to persist. The main winners are japan equity investors. Source: DB, Bob Elliott, The Daily Shot
China stocks cbear market continues unabated
As Hong Kong’s Hang Seng index tumbled 3.06% afterweaker than expected GDP numbers were released, while China’s CSI 300 index shed 0.73%. Meanwhile, AMC Nomura Nikkei 225 ETF went limit up today after Chinese traders ignored warnings to avoid chasing gains in Japanese Stocks. This ETF trades with a 9.5% premium over its net asset value... Source: Bloomberg, Barchart
Who's ordering Aircraft ?
Source: Win Smart
The silent bullmarket...
Global mutual funds' active weighting of Japanese stocks has not risen in the past six months. Source: TME, Factse
Life below zero...
JAPAN 2-YEAR YIELD FALLS BELOW ZERO FOR FIRST TIME SINCE JULY
The 2-Year Japanese Yield Back in Negative Territory 📉
While the anticipation has been building for the Bank of Japan (BoJ) to exit its negative rate monetary policy in April 2024, the market seems to be taking a different turn. Today, the 2-year Japanese bond yield closed in negative territory. The BoJ has signaled its readiness to end the negative interest rate policy, but it's contingent on economic data and the outcomes of the March wage talks. Japan's path to normalization will be unique, as its economy still requires some level of monetary easing. The BoJ's terminal rate is projected to gradually reach around 0.5% over three to four years, potentially beginning with one or two rate hikes in the first year. However, the timeline for the BoJ to abandon its negative interest rate policy is now being seen as possibly extending further into 2024. Governor Kazuo Ueda's cautious statements, combined with unforeseen challenges like the recent earthquake, have led many economists to reconsider their forecasts, shifting expectations from January to potentially April or later. Stay tuned for more updates on this evolving situation. The Japanese monetary policy landscape is certainly one to watch closely in the coming months. Source: Bloomberg.
