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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
- This year, 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, particularly tech equities.
- In the past cycle, tech equities have shown a strong relationship with Chinese liquidity, which we define as the annual change of the Total Social Financing (TSF) 12M sum.
- After consolidating by over 40% since their high reached in February, which corresponds to the peak of the Chinese economic activity, China tech equities (CQQQ) have been retracing higher this month, up over 16% since their local low reached on October 6.
- CQQQ ETF has been testing its 100DMA resistance at 72.87 in the past few days; next level to watch stands at 74, which represents the high of its LT downward trending channel.
- Next resistance above that stands at 75.90, which corresponds to the 50% retracement of the 43.19 – 108.61 range (2020/21 low high).
- However, the recent rebound (which was partly driven by the risk on environment and recent JPY depreciation) may be short-lived as economic data continue to disappoint in China.
- Support to watch on the downside stands at 68.18 (61.8% Fibo).
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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