HI Jon, China has a number of fresh warning signs from issues of a crack down on speculation in sectors of the stock market... The Currency -- YUAN is depreciating as interest rates go up and concerns of Capital flight have given us fresh indications of this going on.... It may be partly driving up the price of Bit Coin recently
China1. Let’s begin with China, where the stock market stumbled again as the Chinese authorities continue their arbitrary acts of rulemaking. This time they hit the insurance industry, criticizing some of the larger firms for buying stocks.
China Vanke, a developer who was apparently being acquired last month, slumped another 6% as a result of the officials’ criticizing leveraged buyouts (ending the acquisition).
2. The nation’s government bond yields rose further, with corporate yields following. The selloff in the corporate sector has been especially acute at the short-end of the curve. Are we seeing some redemptions from wealth management products (WMPs) who tend to hold a great deal of corporate debt?
3. The renminbi is expensive to borrow in Hong Kong again. Rates have been rising quickly for term loans (as opposed to overnight). Here is the 3-month yuan HIBOR rate.
Part of the reason for the tighter offshore yuan market is Hong Kong’s decline in yuan time deposits. Hong Kong residents used to open renminbi accounts to get a much higher rate relative to the Hong Kong dollar. But after the August 2015 devaluation, deposit volumes have been declining. Beijing’s tightening of capital controls is also reducing the yuan availability in Hong Kong.
4. The renminbi implied volatility jumped in recent days as investors brace for more currency declines.
5. Bitcoin hit a multiyear high as market participants continue to point fingers at China’s residents.
6. Many ask where the rest of Asia will stand in a US-China trade dispute. Here are the China- vs. US-bound exports from the largest Asian economies (ex-Japan).
Source: Barclays, @NickatFP, @joshdigga
7. China’s latest batch of economic releases looks quite stable. In fact, some argue that these figures are too stable to be real (with only minimal fluctuations on a year-over-year basis).
• Industrial Production:
• Retail Sales:
• Fixed Asset Investment:
8. China’s Western acquisitions spiked in 2016. With Bejing concerned about capital outflows, will all this shopping spree slow down next year?
Source: @Bfly, @business, @Tmp_Research; Read full article
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AsiaThis chart shows the dramatic decline in South Korea’s Park Geun-hye approval ratings – ultimately leading to her impeachment.
Source: @WSJGraphics, @Tmp_Research; Read full article |
