In today’s briefing:
- China May Nullify World Recession
- Positioning Watch: The Mystery Behind the Massive Shorts in Equities and Bonds
China May Nullify World Recession
- Several indicators point to approaching World recessionary trough and early pick-up. Chinese economic recovery since late-2022 ‘re-opening’ may help explain this
- Chinese Liquidity injections have slowed from their early year pace, but no evidence of deliberate tightening. Also visible acceleration in shadow bank lending
- Switch from last year’s Chinese tightening to this year’s policy easing may lift the World economy higher over coming months. We should look for confirming evidence from other Asian markets
Positioning Watch: The Mystery Behind the Massive Shorts in Equities and Bonds
- Both equity market shorts and US Treasury shorts are close to all time highs in futures positioning data
- But is the positioning data a true indication of the underlying market sentiment?
- We doubt it and discuss why both equity and curve positioning could be skewed by technicalities here
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