Silver Point

Thomas J. Monaco

Silver Point is a boutique research firm that focuses on the broader financial services sector, with a particular focus on troubled institutions globally. 

Asia Ex Japan

Thematic (Sector/Industry)

*Strong Man Strikes Again: Lighting has struck again, not five months since his hiring, Central Bank of Turkey (CBT) Governor Agbal has now been dismissed for raising interest rates. President Erdogan handpicked Sahap Kavcioglu as new CBT Governor. He is the fourth CBT Governor in two years, and a banking professor and newspaper columnist who has argued for lower interest rates, after serving a a lawmaker in Erdogan’s AKP party. We all know what happens when academics are in charge; and*Watch Your Risk: The TRL’s decline is troublesome, and the potential for a TRL gray market would NOT be of surprise at this stage. We continue to worry about counterparty risks should defaults rise. It’s probably not a bad time to start thinking about purchasing CDS protection on single name securities and on the Turkish sovereign.

*Strong Man Strikes Again: Lighting has struck again, not five months since his hiring, Central Bank of Turkey (CBT) Governor Agbal has now been dismissed for raising interest rates. President Erdogan handpicked Sahap Kavcioglu as new CBT Governor. He is the fourth CBT Governor in two years, and a banking professor and newspaper columnist who has argued for lower interest rates, after serving a a lawmaker in Erdogan’s AKP party. We all know what happens when academics are in charge; and*Watch Your Risk: The TRL’s decline is troublesome, and the potential for a TRL gray market would NOT be of surprise at this stage. We continue to worry about counterparty risks should defaults rise. It’s probably not a bad time to start thinking about purchasing CDS protection on single name securities and on the Turkish sovereign.

*Yield Steepening Likely Leads To FRB Action: The recent turmoil in the US bond market has now led to expectations that the Federal Reserve Board (FRB) may announce interest rate policy tweaks as soon as its next meeting on March 16th. The FRB appears to seek inflation, and the question would appear to be when (not if) the FRB will become more aggressive in preventing the long end of the curve from further steepening; and*Watch Your Financial Positions: Coupled with a rapid economic recovery  - especially given the US lead with vaccination rollouts, the steep yield curve has led to YTD US financial sector outperformance. However, if the FRB begins flattening the yield curve, sentiment is likely to quickly turn. As such, near-term caution for financials is likely warranted ahead of next FRB meeting as the recent bond market volatility is likely to force the FRB’s hand on Yield Curve Control (YCC).

*Yield Steepening Likely Leads To FRB Action: The recent turmoil in the US bond market has now led to expectations that the Federal Reserve Board (FRB) may announce interest rate policy tweaks as soon as its next meeting on March 16th. The FRB appears to seek inflation, and the question would appear to be when (not if) the FRB will become more aggressive in preventing the long end of the curve from further steepening; and*Watch Your Financial Positions: Coupled with a rapid economic recovery  - especially given the US lead with vaccination rollouts, the steep yield curve has led to YTD US financial sector outperformance. However, if the FRB begins flattening the yield curve, sentiment is likely to quickly turn. As such, near-term caution for financials is likely warranted ahead of next FRB meeting as the recent bond market volatility is likely to force the FRB’s hand on Yield Curve Control (YCC).

Federal Reserve Board – Doing The Twist

Chart based progressive global trading strategies, Chart Partners

Thomas Schroeder

Chart based progressive global trading strategies

Chart Partners

Chart Partners objective is to discover medium-term cycle turns and profit opportunities before they unfold, within structural trends while preserving capital with clear degrees of risk. We have real return ideas. 

Markets are dynamic and trading systems must reflect this. It is crucial to determine underlying correlations and lead-lag relationships within global markets and the impact on linked instruments. Our weekly Chartonics product gives you short-term trading strategies that can be applied within the medium and longer term macro trends that are mapped out in our strategy updates. 

Our methodology fuses global market variables and isolates drivers in trends. We specialize in FX, index trade in NY and Asia with a focus on Asian stocks. 

Technical Analysis

FTSE China A50 Index / Technical Analysis

We view A shares as the lead driver for HK to turn the corner toward a more bullish stance. HSI 31k short has met our ideal 28,800 target where we reduced the bulk of our short but do see risk of a final draw down to mark a key low. A50 and H shares are our long vehicles. A50 trendline and bull support stands out as the make or break point.

We view A shares as the lead driver for HK to turn the corner toward a more bullish stance. HSI 31k short has met our ideal 28,800 target where we reduced the bulk of our short but do see risk of a final draw down to mark a key low. A50 and H shares are our long vehicles. A50 trendline and bull support stands out as the make or break point.

We called for covering short exposure and putting on risk in our bull group near SPX 3,800 support (hit 3,804.75) and did see a nice bull reversal in NY to short up the bull case off of SPX wedge support. The risk buckle came within the Feb 21 window. We now need to clear hurdle resistance levels to avert a downside re test.This insight focuses on upside resistances to clear to open the way to a new highs and supports to hold to validate the SPX bull reversal off of primary wedge support. Our bull group is where we added risk and outline where we want to add risk in Asia.

We called for covering short exposure and putting on risk in our bull group near SPX 3,800 support (hit 3,804.75) and did see a nice bull reversal in NY to short up the bull case off of SPX wedge support. The risk buckle came within the Feb 21 window. We now need to clear hurdle resistance levels to avert a downside re test.This insight focuses on upside resistances to clear to open the way to a new highs and supports to hold to validate the SPX bull reversal off of primary wedge support. Our bull group is where we added risk and outline where we want to add risk in Asia.

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Quantitative Analysis

The China equity index futures market has come a long way since index futures started to trade on the <a href="https://www.smartkarma.com/entities/shanghai-shenzhen-csi-300-index" target="_blank" data-smartkarma-citation="entities:22906:1" rel="noopener">Shanghai Shenzhen CSI 300 Index (SHSZ300 INDEX)</a> in 2010. There have been booms and busts, volumes and open interest have soared and plummeted, rules have been relaxed and tightened and relaxed again, and the market continues to move forward.Currently, index futures trade on the <a href="https://www.smartkarma.com/entities/shanghai-shenzhen-csi-300-index" target="_blank" data-smartkarma-citation="entities:22906:1" rel="noopener">Shanghai Shenzhen CSI 300 Index (SHSZ300 INDEX)</a>, the CSI500 Index, and the <a href="https://www.smartkarma.com/entities/shanghai-stock-exchange-sse-50-a-share-index" target="_blank" data-smartkarma-citation="entities:31073:1" rel="noopener">SSE50 Index (SSE50 INDEX)</a>. There are no published statistics on the share of volume and open interest held by institutional and non-institutional investors, so we take a stab at trying to figure out broadly what it could be.Our analysis indicates that till mid 2015, most of the volume traded was driven by retail investors and they held a lions share of open interest too. Post the market crash and subsequent resurgence, retail investors share of volume traded and open interest has likely dropped substantially due to the market entry of more institutional investors, proprietary trading shops, and quant traders. Strategies employed by non-institutional investors mainly run counter to the retail flow and that has dampened the futures basis in the recent past.

The China equity index futures market has come a long way since index futures started to trade on the Shanghai Shenzhen CSI 300 Index (SHSZ300 INDEX) in 2010. There have been booms and busts, volumes and open interest have soared and plummeted, rules have been relaxed and tightened and relaxed again, and the market continues to move forward.Currently, index futures trade on the Shanghai Shenzhen CSI 300 Index (SHSZ300 INDEX), the CSI500 Index, and the SSE50 Index (SSE50 INDEX). There are no published statistics on the share of volume and open interest held by institutional and non-institutional investors, so we take a stab at trying to figure out broadly what it could be.Our analysis indicates that till mid 2015, most of the volume traded was driven by retail investors and they held a lions share of open interest too. Post the market crash and subsequent resurgence, retail investors share of volume traded and open interest has likely dropped substantially due to the market entry of more institutional investors, proprietary trading shops, and quant traders. Strategies employed by non-institutional investors mainly run counter to the retail flow and that has dampened the futures basis in the recent past.

China Equity Index Futures: Who Holds the Open Interest?

China

The FTSE China A50 Index includes the largest 50 A Share Chinese companies by total market cap. 

FTSE China A50 Index (XIN9I INDEX)

Turkey - YELP!

TURKEY: Not five months since his hiring, the CBT Governor has been replaced. The TRL’s decline is troublesome, and a TRL gray market would NOT be...

Thomas J. Monaco

Federal Reserve Board – Doing The Twist

FEDERAL RESERVE BOARD: There are expectations of FRB interest rate policy tweaks as soon as its next meeting. If the FRB flattens the curve,...

Thomas J. Monaco

China/HK Buy Levels Being Met

A shares are the lead driver for HK to turn the bull corner. HSI 31k short has met our ideal 28,800 target where we reduced the bulk of our short....

Thomas Schroeder

SPX Hit 3,800 Long Risk Support

We called for covering short exposure and putting on risk in our bull group near SPX 3,800 support (hit 3,804.75) for the bull case from SPX wedge...

Thomas Schroeder

China Equity Index Futures: Who Holds the Open Interest?

We look at the change in the market landscape for the index futures in China and try to ascertain if retail investors still hold sway or if that...

Brian Freitas