Trial now

Heading North


Modi, AMLO Top Major Economy Leader Poll, Macron Last


Under Pressure


Trend Condition Remains Bearish

Sign up now for free access to this content.

Please enter your details below and select your areas of interest.

  • In the past 9 months, we have seen that the sharp contraction in Chinese liquidity combined with the deceleration in the economic activity have been weighing on domestic asset prices.
  • The Hang Seng Index was down nearly 25% in the beginning of October, and was testing the low of its LT downward trending channel.
  • However, risky assets have been trending sharply higher in the past two weeks, with Chinese equities up over 10% despite disappointing data.
  • We saw this week that China Q3 GDP and September Industrial Output came in below expectations at 4.9% YoY (vs. 5% exp.) and 3.1% YoY (vs. 3..8% exp.), respectively.
  • The Citi surprise index has also been going down in the past 15 months, implying that economic data have constantly disappointed.
  • Hang Seng Index is currently testing its 26,154 resistance, which corresponds to the 50% Fibo retracement of the 21,139 – 31,168 range.
  • Next level to watch on the topside stands at 26,694 (100DMA), followed by 27,337 (38.2%).
  • On the downside, first support to watch stands at 24,970 (61.8% Fibo).

Source: Bloomberg/MNI