Hong Kong & China Equity Losses Tempers Broader Risk Appetite

Risk appetite has been tempered somewhat by HK and China equity losses. The HSI currently tracks down around 1.7%, the CSI 300 off around 1.0%. Both indices aren't too far away from late 2023 lows.

• Last week we saw retracement of late 2023 gains as the dominant trend. This week is an important one in terms of data, highlighted by Friday's inflation print.
• There doesn't appear to be an obvious macro catalyst for renewed downside in these indices. Some of the individual company news includes - Evergrande's EV unit suspended trading in Hong Kong, while builder Xinyuan's US unit filed for Chapter 11 bankruptcy. Another builder, Logan, got a reprieve in a Hong Kong court though (see this BBG link).
• Trade tensions with the EU and China sanctions on US firms may be weighing on broader sentiment as well.
• These losses have helped trim US equity futures, now back to flat. The USD has recovered some ground, with AUD and NZD paring gains. USD/CNH sits back above 7.1600, while most USD/Asia pairs are off their respective lows.
• Elsewhere, US Tsy futures sit up from lows.