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(Z1) Off Lows, But Remains Weak


Still Vulnerable


Bullish Price Sequence

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The overarching feel to the start of what has been a relatively limited round of Asia-Pac trade is defensive, with worries surrounding the giant Chinese property developer Evergrande seemingly providing much of the early impetus this week. To recap, stories of early redemptions re: investment products in the co. among company executives and cut-price property sales to pay off wealth management product investors have headlined ahead of a notable round of interest payments that the company is scheduled to make on Thursday. A reminder that recent newswire source reports have already pointed to worries surrounding the ability of the company to service its debts, with suggestions that policymakers believe that the firm will not be able to meet its obligations.

  • Early trade in Hong Kong has seen the Hang Seng property index slip to the lowest level witnessed since '16, while the Hang Seng index itself is ~2.5% lower on the day.
  • High beta currencies find themselves at the bottom of the G10 FX leader board, while the USD, JPY & CHF sit at the other end of the table.
  • S&P 500 e-minis have traded below their 50- & 55-DMAs (there hasn't been a close below these MAs since March) and sit at levels last seen on Aug 20.
  • A quick reminder that the situation at Evergrande is opaque. While some of the loudest voices have suggested that the failure of the firm could provide a Lehman-like moment for China, many point to a more insulated event, which policymakers will try to confine via the use of credit tools/supply.