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EQUITIES

Focus On Chinese Property Developers

US TSY OPTIONS

TYZ1 129.50 Puts Blocked

JGBS AUCTION

Japanese MOF sells Y2.8233tn 6-Month Bills:

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  • The rising fear of an Evergrande bankruptcy combined with the strong USD have been weighing on EM equites in the past two weeks.
  • In addition, the sharp contraction in Chinese liquidity in the past 10 months has also been weighing on EM risky assets, and is currently pricing in lower EM stocks in the near term.
  • EM equities keep testing lower highs since their peak reached in mid-February, indicating that the momentum looks currently bearish.
  • The chart below shows that the MXEF Index (MSCI EM) fell below the 1,285 support this week, which represents the 23.6% Fibo retracement of the 751.80 - 1,449.40 range.
  • Next support to watch on the topside stands at 1,200, which corresponds to the low of its LT downward trending channel.

Source: Bloomberg/MNI