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Malaysia - Still Waters Run DeepAs Q2 2019 is underway, global financial markets have experienced a melt-up in assets prices, with some markets up over 20 percent year-to-date. However, despite the run in global asset prices, there is one country that has missed out on the rally, and that is Malaysia. Malaysian equities ( EWM ) (INDEX:KLSE) have declined -3.77% in 2019, taking the mantle as the worst performing equity market this year so far. To further complicate matters, the yield on the Malaysian 10-year government bond has risen to 3.932% as of this post, up from 3.81% in March. Lastly, the Malaysian Ringgit has weakened by 1.92% percent in April 2019, loosing 0.08% against the US Dollar for the year, and forecast to fall further. Under-performance in Malaysian assets in recent trading sessions can be attributed to the fact that global investors are worried that Malaysian bonds may be removed from the FTSE Russel, a key global bond index for international investors. If this were to occur, Malaysian credit markets would see billions of dollars in outflows, in conjunction with a spike in yields, as investors flee the market en masse. However, the under-performance of Malaysian assets in 2019 can be attributed to recent downgrades in Malaysian gross domestic product (“GDP”) by the International Monetary Fund (“IMF”). The IMF downgraded the country’s GDP to 4.5% for 2019, down from 4.7% as stated in their prior forecasts. Growth is expected to slow this year as uncertainty stemming from the US-China trade war is expected to put further pressure on Malaysian exports. Furthermore, on a micro level, the threat of elevated household debt among Malaysian households is also lurking in the background. With household debt-to-GDP levels hovering around 83% in 2018, some of the highest in South East Asia, there is worry that leveraged households who have taken large sums of debt for real estate investment and consumption may have difficulty servicing their existing debt. This is especially worrisome in the midst of a slowing economy. Thus, there is risk that elevated household debt could add further pressure to future economic growth, and threaten economic stability within the Malaysia, if it continues on its current trajectory. As a result, due to these ongoing internal macroeconomic and financial headwinds, we are bearish on Malaysian assets and caution investors to tread lightly within this space.
Short
by EconomicsGlobal
Malaysia - Still Waters Run DeepAs Q2 2019 is underway, global financial markets have experienced a melt-up in assets prices, with some markets up over 20 percent year-to-date. However, despite the run in global asset prices, there is one country that has missed out on the rally, and that is Malaysia. Malaysian equities ( EWM ) (INDEX:KLSE) have declined -3.77% in 2019, taking the mantle as the worst performing equity market this year so far. To further complicate matters, the yield on the Malaysian 10-year government bond has risen to 3.932% as of this post, up from 3.81% in March. Lastly, the Malaysian Ringgit (USDMYR) has weakened by 1.92% percent in April 2019, loosing 0.08% against the US Dollar for the year, and forecast to fall further. Under-performance in Malaysian assets in recent trading sessions can be attributed to the fact that global investors are worried that Malaysian bonds may be removed from the FTSE Russel, a key global bond index for international investors. If this were to occur, Malaysian credit markets would see billions of dollars in outflows, in conjunction with a spike in yields, as investors flee the market en masse. However, the under-performance of Malaysian assets in 2019 can be attributed to recent downgrades in Malaysian gross domestic product (“GDP”) by the International Monetary Fund (“IMF”). The IMF downgraded the country’s GDP to 4.5% for 2019, down from 4.7% as stated in their prior forecasts. Growth is expected to slow this year as uncertainty stemming from the US-China trade war is expected to put further pressure on Malaysian exports. Furthermore, on a micro level, the threat of elevated household debt among Malaysian households is also lurking in the background. With household debt-to-GDP levels hovering around 83% in 2018, some of the highest in South East Asia, there is worry that leveraged households who have taken large sums of debt for real estate investment and consumption may have difficulty servicing their existing debt. This is especially worrisome in the midst of a slowing economy. Thus, there is risk that elevated household debt could add further pressure to future economic growth, and threaten economic stability within the Malaysia, if it continues on its current trajectory. As a result, due to these ongoing internal macroeconomic and financial headwinds, we are bearish on Malaysian assets and caution investors to tread lightly within this space.
INDEX:KLSEShort
by EconomicsGlobal
Hong Kong Dollar Strengthens on Rate SpikeThis is an excerpt from MACRO BRIEF: Hong Kong Dollar Strengthens on Rate Spike originally published March 10, 2019. The short-HKD trade is nearly consensus, which reminds me of the short-yuan trade a few years ago that was largely snuffed out by the PBOC. Problem here, though, is the HKMA's attempts to draw in HKD inflows have been superficial at best. Additionally, with China likely continuing using Hong Kong as a dollar ATM it is hard to estimate how long the strength would last. The 3.7 sigma move has pulled in quite a bit but still remains extended. 7-day ROC saw its largest spike since December when the HIBOR 1M and 3M futures converged. We'll continue to monitor the situation, but prolonged elevation of rates could be a problem considering that Hong Kong's economy is strongly interest rate sensitive with banking assets and domestic credit to public sector as a percentage of GDP at well over 200 percent. To access original charts and commentary on this blog post click here .
by TheMacroStrategist
Expect a Downturn in EM If you Expect a Downturn in the USIts not quite a great idea to invest in EM if one is expecting a downturn as EM will be significantly hit from drying up liquidity via outward capital flows and lower investment. Happened in 2008 with the liquidity crisis and again in 2011 with the EU sovereign debt crisis. We can see this relationship between developed markets and emerging markets through a correlation coefficient between the S&P 500 and the most liquid emerging markets ETF in the world EM. Moreover, EM is vulnerable to a Chinese financial crisis as well if the Chinese can't figure out how to lower their debt levels which they really havn't yet. Either way, I would avoid EM at these price levels.
MIL:EMShort
by WhiskeyTangoFoxtrot3
USD/TRY long long longI believe the local election would help to the goverment for next few days and Mr. Albayrak has announced they will show the economic programme in April. But i think that programme will suck cause the Turkey have more serious economical and political problems like unemployment rate is most highest rate before the 2008, the inequality of the Turkish citizens are getting higher. And the biggest problem of Turkey is their growth depend their import products and it cause high number of current deficit. The low TRY would help Turkey to close that deficit. But they have to make reforms which they did in 2002,2003,2004. They should give attention and more care the relationship with USA, Russia and China. President Erdogan has blamed the Jp Morgan for last crash, it doesnt make any sense. If the goverment take reasonable and good positions i would revise my analysis but probably they not and thats my target on TL. Those are just my views not investment advisory.
Long
by alejandrofiles
S&P 500 entering an ORDER BLOCK | TAPE READINGThe price is edging up. If you look closely, you will see an Elliot 5 Wave impulse. If you know about fractals, you should have that in your trading arsenal because the Elliot Wave principle is a natural, sensational and accurate tool in 'forecasting' price action. The waves move in harmony according to the Fibonacci patterns and spirals. The Fibonacci is the actual backbone of the Elliot wave principle (although i haven't included it in this price level - even though I have, by virtue of Elliot). The US economy is projected to be moving down. With the recent trade wars, French (fuel) tax riots, weakening global demand, drop in oil, and massive debt, the US should start a process of deleveraging soon. The SPX is reflective of the global economy. The markets have been rising this year, the biggest performers in the upcoming quarters should be emerging economies by virtue of the law of diminishing returns. The global landscape is changing right before our eyes as China takes the stage as the the leading super power. Overall, Trump's Trade War was a misdirected battle that's turning out to be a blessing for all emerging economies because it's happening on the backdrop of President Xi's aggressive, futuristic and rather ambitious One Belt One Road Initiative. The global landscape is going to be shaped by the actions of changing global movement and emerging drivers in the global macro economy.
SP:SPXEducation
by Money_Lab
EEM Resuming Bull Market Started in 2016Emerging Markets (EEM) seem to be resuming the bull market that started in early 2016. 1) Recently broke out from downward channel 2) Broke out from alternative shorter term negative trend line 3) Is in the track to end the week confirming a bullish pivot, surpassing the last short term top. Medium term objective is last major top the occurred in jan 18. Long term objective is a major long term impulsive move with similar magnitude and duration of the jan 16 - jan 18 uptrend move. Stop at the same level the EEM completed its pullback to the negative channel.
AMEX:EEMLong
by BrunoBoni
EEM Stuck Below MAEEM is trending in a down-up counter trend. It has failed over the last 8 months to close above its Moving-Average on a weekly basis. I am using the 16-day Moving Average (representing 3 weeks +1 of trading days), but you can play with the period and you will see similar results. EEM is currently testing close to its 16-day Moving Average and near the top of its channel resistance line. This is telling me that there is a strong possibility for the price to drop further down over the next week or two. I think taking a sell-limit at $39.00 with a buy-stop at $40.61 (its 16-day Moving Average), and a take-profit at $37.58 (a previous resistance level tested) is the way to play this trend trade.
AMEX:EEMShort
by BinaryPairing
TSLA - leading the charge but one of many to comeTSLA ; despite their occasional run-in with the SEC or hickup from logistics behind timing in production Tesla is a dominate force in an emerging market and can not be ignored as a force to be reckoned with. AMZN found itself in a very similar situation back in 2005 and since then they have proven their value through diversification and exemplary customer service. The only problems Tesla might run into is over diversifying before the time is right. Musk has been diligent as to feed the company cash as it's needed to ensure the success of the business. The fact that NASA was able to effectively privatize space travel is just icing on the cake and I think we see this trend continue... prisons and space leading the charge but there are many other subcategories that have potential for privatization and Amazon and Tesla will be the leading brands into 2030s, at this rate, no doubts. From the technical side TSLA looks great above 271.85 for the *long* (bullish) ((price to go up))... our next key level and the one acting as resistance presently is 360.47. Beyond this we will push new alltime highs and I believe a catalyst will be required for this to happen and the move will happen quickly.
NASDAQ:TSLALong
by Wingfield
No, Halvings Don't MatterAs I dig deeper, the Bitcoin picture becomes clearer. I'm starting to believe that Bitcoin is the penny stock of the world's finance. I'm comparing Bitcoin to a fund that manages a basket of EM-related assets. This is the reported breakdown as of October: China 19.95% Other 16.59% South Korea 14.78% Taiwan 11.39% Russia 8.23% Brazil 8.01% South Africa 6.33% India 5.97% Cash & Cash Equivalents 5.29% Peru 3.46% You can see the almost direct relationship between crypto and the fund. As Bitcoin has grown, the behaviour has become more and more similar between the two. Even back in 2012 there was already a developing parallel. This has lead me to believe that more than crypto being at the mercy of the dollar, in order for the space to be bullish, the world's finance has to have the right conditions. Investors need to be so confident that they move not only into emerging markets, but go all the way into the penny stock of the world. It isn't yet completely clear to me why EMs top first, but it may have something to do with the low cap nature of crypto. As for the bottoms, there isn't a clear relationship either. I'm inclined to say that crypto rallies first, once again, due to its low cap nature. This isn't always the case, but it could be a good explanation. Beyond the fact that crypto might simply be a penny stock for people on a macro scale, it seems that "domestic" issues, such as halvings, hacks, news, forks, etc. only seem to affect either the slope of the trend or very localised movements. If we look back at the 2013 rally it doesn't make it implausible to have a move to 10-15k by December. Furthermore, meme lines won't predict or find the real bottom. What you can do is start looking into real world issues. The overall financial world needs a very confident outlook in order for crypto to move. That being said, I feel that emerging markets will have a breather soon, allowing crypto to have a partially bullish move. TL;DR halvings don't matter for macro trend. For moon or crash you need to look at emerging markets.
BITSTAMP:BTCUSDLong
by UnknownUnicorn1038536
3