Leveraged plays in down trending markets are rarely a good idea

The situation in Greece continues to dominate the headlines in Europe and cause headaches for European officials, with the (honestly this time it really is final) deadline approaching. On balance it still looks like some form of ‘extend and pretend’ … Read More

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A Greek default is more likely than Grexit and may trigger hidden contagion

When momentum stalls in a market, short term traders tend to become less greedy and more fearful and are thus vulnerable to profit taking – as well as to the stories the short sellers whisper in their ears to make … Read More

Posted in Bonds | Leave a comment

The bond roller-coaster ride – all about leverage and crowded positioning creating forced buyers and distressed sellers

The spring bond market sell-off has been extremely painful for traders, particularly in European and emerging market bonds. It was clearly the ‘Sell in May’ trade that had strong echoes of the taper tantrum of 2013. Then, as now, we … Read More

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The Asian Big Bang

While the majority of investors are worrying about things through the traditional western viewpoint, the real story is that China is building a financial system before our eyes. The balance sheet structures are being reformed and established to create a … Read More

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If we chose to look in the right places, China is largely doing the right things with its economy

The recent retreat in the dollar trade weighted index has been matched by a rally in commodity prices, particularly oil, but I suspect that these are pull backs in new long term trends rather than reversals. Just as the dollar … Read More

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Asia needs to broaden and deepen its financial services infrastructure to solve some capital issues

The sell-off in bond markets has elements of 1994 about it. So far other markets have been resilient, but the traditional role of equities as the ‘ATM’ for the leveraged fixed income traders is making them rightly nervous. China’s latest … Read More

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Enormous election uncertainty in the UK

Many markets, including Hong Kong, are operating a short week this week thanks to the May day bank holiday, which doubtless will leave Monday relatively quiet as well as many take the long weekend. Japan is effectively closed all week … Read More

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China’s vast savings are being encouraged to move out of cash and housing and into capital markets

Unlike 2007 and 2009 the rally in Chinese markets does not appear to be a function of loose monetary policy. Despite recent cuts, monetary policy in China remains tight, suggesting  still more room for manoeuvre. Meanwhile fiscal stimulus through the … Read More

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Will international capital start to flow to Hong Kong and by extension China?

The Rubik’s cube of Chinese reform continues to click into place, and it was interesting to see an article in the Economist this week focussing on reform rather than the traditional obsession with the GDP number. Over the last few … Read More

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The one market that looks interesting is Japan

After a necessary correction, the dollar looks to have stabilised, while commodity markets remain very weak, which is good for consumers but bad for dollar debtors. In Europe, the Greek saga continues and  looks unlikely to settle anything before Easter, … Read More

Posted in Japan | Leave a comment
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