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My Diary 598 --- The Uneasy Asset Markets

(2009-08-05 05:30:35) 下一个

Trading Diary (July 30, 2009) --- The Uneasy Asset Markets

X-asset markets and Macro headlines

Overnight, US posts marginal losses as crude drops & yet another weak auction weighed on sentiment. Headline wise, durable orders was disappointing (-2.5%MoM v cons -0.6%)and a FED Beige Book talking of moderation in the slowdown. But Fed's Beige Book was generally mixed --- retail mixed to down, mfg saw modest uptick, lending stable to down, labor still bleak, real estate mixed with commercial RE hardest hit. In Fixed income and commodity space, UST $39bn 5yr Auction had bid-to-cover ratio 1.92, the lowest since Sept-08. Foreigners once again seeing MoM decline. Crude -6.4% after DoE show a LTE build in crude inventories (+5.1mn v cons -1.5mn) through gasoline saw bigger draw (-2.3mn vs. flat cons). Looking ahead, Jobs report, CPI and household spending will all be watched for signs of life.

In addition, the biggest fear over the last 3 months revolved around USD saw turning around. The EUR is 2% weaker post the US-China bilateral talks. The Gold market is back below the $940 level and in play for $890 again. Oil is closing below $63 bbl down over 6%. Yet US shares didn’t collapse today – they held to a steady down 0.5% despite the weaker durable goods and very beige book. It seemed that many investors are thinking that the China shares have replaced the SPX for the hope of global growth play. Net-net, the risk sentiment was poor as many asset markets uneasy about the last month’s bull run. 

Hong Kong China News

Many brokers blamed the big -5% sell-off yesterday on A-shares on rumors of stamp duty and RRR hike. But most of my China contacts think it is unlikely. In fact, one of them mentioned that the trigger for the selling was SSF’s chairman saying that A-shares are at reasonable levels now but doesn't like the index moving up from here as 3000-3400 is his fair range. Some said Social security funds might have redeemed some investments. I think profit taking makes sense as the benchmark has gone up +70% in 5 months plus 3368 is a big technical level if you look at the 2 year Fibonacci chart.  

Hong Kong market saw broker catching up and upgrading their targets after HK/China have rallied 50% in 4 months. Yesterday JP Morgan upgraded A-share target to 4000 on back of improved 2H corporate earnings and Credit Suisse moves up H-share target to 17850 (50% upside from here).

Overseas Markets Review

After surging 10% in past 2-weeks, global equity prices edged down for two days now. Overnight, equities slid 0.5% in US and 1% in Ems, while stocks rose 0.8% in EU and 0.3% in Japan . Elsewhere, after oil stockpiles surprised by oil inventory figures, 1MWTI oil slumped $3.88 to $63.35/bbl. Industrial metals also contracted for the second day in a row. 2yr USTs yield moved up 8bp to a five-week high at 1.16%, while 10yr dipped 3bp to 3.66%. USD strengthened against both EUR and JPY, closing at EUR1.405 (from $1.417) and JPY95.0 (from 94.6).

 

 

 

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