UBS | The launch of the Shenzhen-Hong Kong Stock Connect program this year was recently confirmed by top Chinese government officials. We estimate that about 505/218 Shenzhen/HK stocks could be introduced into the existing Shanghai-Hong Kong Stock Connect, leading to over 70% of the A-share market cap and 84% of the Hong Kong market cap to be mutually open.
It feels likely that markets will be waiting for more certainty on Fed hikes to push USD higher, especially given years of post-crisis overpricing of higher interest rates.
Caixin | China’s banks lent out 4.67 trillion yuan in the first quarter, central bank data show – a figure that surpasses the record seen in the same period of 2009, when the authorities went on a spending spree in a bid to spare the country from the ill effects of the global financial meltdown.
Benjamin Cole via Historinhas | Stanford luminary and economist John Cochrane is touting the fiscal theory of the price level (FTPL), in which the anticipated future of federal budget primary (operating) deficits is the key tell in present-day inflation. If the national budget looks re-inky, then inflation will result.
UBS | Non-Japan Asian private debt is now the highest in the world for any major region and is climbing toward 170% of GDP. As we have argued in our Debtopia thesis since 2013, rising leverage will increasingly result in diminishing marginal benefits to economies and profits when debt becomes excessive.
Kate Gordon via Caixin| It’s official: we’re in a time of energy transition. On April 22, Earth Day, the UN’s most recent climate deal – known as the Paris Agreement – will be formally signed in New York, ushering in a new era of country-led action to reduce carbon emissions.
Julius Baer Research | After last Thursday’s European Central Bank (ECB) meeting, the US Fed and the BoJ are due to report this week. Will these three heavy-weight central banks do whatever it takes to reflate the global economy? We believe definitely, yes, if reflation does not unfold as desired.
Natixis AM | In Q1 I had the chance to travel and spend some time with our U.S. advisor and investor clients. While no two portfolios are identical, I was struck by one major commonality: the amount of cash and uninvested balances left in portfolios. On a recent trip to the West Coast, advisors frequently noted portfolios with 10%–40% (!) cash.
UBS | We hosted three meetings in HK this week for Chinese construction companies, which included China Railway Construction Corporation (CRCC), China Railway Group (CRG) and China Communications Construction Company (CCCC).
Benjamin Cole via Historinhas | Probably bank and other financial institution bailouts, within context, are positive for the economy. Indeed, aggressive robustly financed bailouts should be conventional policy, while other regulations eschewed, as long as shareholders and convertible bondholders take the first, big and hard hit of any major financial institution failure.