China Trade
there is an interesting dynamics playing out in RMB FX market, markets have been too strong on CNH whilst most recent CNY fixing was nearly 300 pips lower than CNH’s current market pricing.
with Chinese national teams not selling into the rally like how they used to do, make me wonder A-share and H-share/ADR are going to diverge in performance next few sessions simply due to FX impact and assumed all else equal.
more specially so, Shanghai and onshore markets overall ...

9/23 morning notes
The market gives me the vibe of “I don’t care, wait until who gets into White House, what congress looks like, then I will see (or panic).” For now, music is on. Every blip proves to be an opportunity to rotate/buy. The market is still having a post FOMC drifting effect.
The week kicked off on China stimulus hope as PBoC cuts rate, fueling speculation of officials are ramping up effort to revive with a planed Tuesday press briefi...

FOMC meeting- There has not been this coin toss moment before FOMC meetings in a while, but does 25 or 50 bps cut really matter? What investors should focus on is the path of rate cuts as the committee updates new Summary of Economic Projections and Jay Powell’s performance in press conference. The fear and signal of a recession has been conflicted by soft-landing hopes with equities, and bonds are pricing a worst case scenario. What goes up most comes down, and vice versa. CME fed watc...

Reading the tea leaves of Powell Jackson Hole speech, it was not very reassuring. The so called, “Powell Pivot” - looks more like a Powell Affirmation of current market pricing. Based on current pricing in the SOFR curve, it is almost assumed a recession in 2025, and I am not convinced that we will have such severe recession in 2025. Thus, front end of yield curve might be dropping lower much or at such precipitous pace. All eyes on employment going forward, inflation is...

One of my favorite quotes is: good stock price does not mean good company, and vice versa. Last week, Jay Powell delivered what most people expected out of him, and this week through Labor Day week will be a test to the correlation between thin liquidity and volatility. NVDA earning on 8/28/2024 will be the core of such test. Looking at an atypical way to preview the earning, it is very telling that markets have been consistently under appreciating as PE forward (next 12 m...

If there is anything to take away from last two weeks, it would be that the price action volatility across asset classes can be sudden and severe. The economic releases and news are light this week while Jackson Hole conference will be the key focus as is the price action and momentum.
As risks going ahead, the ability for recent equity rally and lower volatility going into September will be a hard task to achieve. Overall, this week is going to be a wait and see week as dem...