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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
CHINA
- China total aggregate financing rose significantly more than expected in January, up 6.17tr CNY (vs.5.4tr CNY expected), up from revised 2.368tr CNY the previous month.
- The annual change in ‘liquidity’ which we define as the annual change in China Total Social Financing (TSF) 12M sum, continues to recover sharply from its October lows.
- The top chart shows that after declining significantly between October 2020 and October 2021, the annual change in TSF 12M sum has increased from -5.14tr CNY to -2.81tr CNY in the past four months.
- A reversal in China liquidity (combined with policy easing) could lead to a sharp recovery in domestic risky assets, which were trading at distressed levels in the end of 2021.
- Hang Seng Index has been trending higher in the past few weeks, up nearly 10% from its January low, and recently supported by the recent buying by China’s so-called ‘national team’ (state-back funds).
- China tech equities, which appear ‘cheap’ following the significant correction in 2021, could also experience a significant rally in 2022 as China continues to loosen financial conditions.
- The bottom chart shows the strong co-movement between the annual change in TSF 12M sum and the YoY change in Chinese tech stocks.
Source: Bloomberg/MNI
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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