Market Depth

While China’s PBOC leaves their Loan Prime Rates unchanged as expected, the central bank issues an official statement on Friday warning of FX market intervention, should the yuan’s precipitous decline continue. Nonetheless, the yuan continued its downside move during Monday’s Asia trading session, as Wall Street estimates further price out the once-expected recovery. Weston Nakamura discusses the yuan’s weakness in context of “USD strength.”

Then onto Japan, where the Nikkei225 and TOPIX indices continue their relentless marches higher for an 8th consecutive day, to new 3-decade levels. Weston Nakamura discusses how this current market setup may be one of the “once-per-decade” Japan equity explosions higher, given the foreign inflows and positioning, as well as the coincident rise in implied volatility that is often present when Japan has its episodes of “crashing to the upside.”

--

Follow Market Depth On Spotify: https://spoti.fi/3mVTs9U

Follow Market Depth On Apple Podcasts: https://apple.co/40dA2vm

Follow Weston: https://twitter.com/acrossthespread

Follow Blockworks: https://twitter.com/Blockworks_ 

Get top market insights and the latest in crypto news. Subscribe to Blockworks Daily Newsletter: https://blockworks.co/newsletter/

--

Disclaimer: Nothing discussed on Market Depth should be considered as investment advice. Please always do your own research & speak to a financial advisor before thinking about, thinking about putting your money into these crazy markets.

The Chinese yuan, which had been in recent accelerated decline, hitting new year-to-date lows, has now crossed through a very key level into the 7-handle for onshore USDCNY. Furthermore, the currency's sharp move lower seems to confirm the weak macro data releases of late.

Weston Nakamura discusses the Chinese yuan's price action, and explains its correlation across asset classes and markets - including the S&P500, copper prices, the Hang Seng Property Index, and more. Weston also provides implications of what the falling currency could mean for markets going forward.

--

Follow Market Depth On Spotify: https://spoti.fi/3mVTs9U

Follow Market Depth On Apple Podcasts: https://apple.co/40dA2vm

Follow Weston: https://twitter.com/acrossthespread

Follow Blockworks: https://twitter.com/Blockworks_ 

Get top market insights and the latest in crypto news. Subscribe to Blockworks Daily Newsletter: https://blockworks.co/newsletter/

--

Disclaimer: Nothing discussed on Market Depth should be considered as investment advice. Please always do your own research & speak to a financial advisor before thinking about, thinking about putting your money into these crazy markets.

China once again misses consensus estimates on three of their latest data releases today, showing weakness in retail sales, industrial production, fixed asset investment, as well as a record high 20% youth unemployment rate.

Given the deluge of macro data out of China so far this month, Weston Nakamura organizes and presents a clear, full picture of where China currently stands regarding the state of the domestic consumer, industrial manufacturing, and loans, credit and investments - the results of which point to an economy unable to regain traction following the sudden lifting of their strict COVID policies.

In light of the TOPIX index hitting a new 33-year "bubble-level" high, and Japan as the world's best performing equity market globally in 2023, Weston also discusses the bear case for the Japan equity outperformance as seen by domestic Japanese institutional investors.

--

Follow Market Depth On Spotify: https://spoti.fi/3mVTs9U

Follow Market Depth On Apple Podcasts: https://apple.co/40dA2vm

Follow Weston: https://twitter.com/acrossthespread

Follow Blockworks: https://twitter.com/Blockworks_ 

Get top market insights and the latest in crypto news. Subscribe to Blockworks Daily Newsletter: https://blockworks.co/newsletter/

--or

Disclaimer: Nothing discussed on Market Depth should be considered as investment advice. Please always do your own research & speak to a financial advisor before thinking about, thinking about putting your money into these crazy markets.

As the first round of Turkish general elections result in a runoff round, with President Erdogan facing his toughest political challenge yet, Turkish assets have been exhibiting volatility - as one would expect given the uncertainty. However, the one asset class that remains strangely stable (thus far) is the Turkish Lira, as continued state interventions dampen any sharp selling pressure from plunging deep into new record lows (for now).

Weston Nakamura does a deep dive into the Turkish lira, and the often overlooked significance that the lira has had on global markets, citing two instances in particular: the 2020 rally in gold and Bitcoin, and the December 2021 Christmas reversal rally in global risk assets.

Weston then finishes with how the lira may impact markets, including the Japan equity markets, gold, and Bitcoin in the given market setup, with the runoff elections looming at the end of the month.

--

Follow Market Depth On Spotify: https://spoti.fi/3mVTs9U

Follow Market Depth On Apple Podcasts: https://apple.co/40dA2vm

Follow Weston: https://twitter.com/acrossthespread

Follow Blockworks: https://twitter.com/Blockworks_ 

Get top market insights and the latest in crypto news. Subscribe to Blockworks Daily Newsletter: https://blockworks.co/newsletter/

--

Disclaimer: Nothing discussed on Market Depth should be considered as investment advice. Please always do your own research & speak to a financial advisor before thinking about, thinking about putting your money into these crazy markets.

In this week-in-review, Weston Nakamura follows up with market themes from earlier in the week. Starting with the frenzy and crash in Chinese bank stocks against a resilient Japanese equity market, Weston revisits the Japan - China market divergence call. 

Then, its over to Niigata Japan, where G7 Finance Ministers and Central Bankers have convened to discuss inflation, Russian sanctions, banking crises, and a host of other measures - but instead, find themselves with only one issue in mind: the looming US debt ceiling debate.

Finally, Weston follows up with market reactions to earnings out of Nissan Motor and Honda Motor, after steelmaker JFE Holdings had just raised guidance citing strong production demand from the automotive sector, no longer hindered by a semiconductor chip supply crunch.

--

Follow Market Depth On Spotify: https://spoti.fi/3mVTs9U

Follow Market Depth On Apple Podcasts: https://apple.co/40dA2vm

Follow Weston: https://twitter.com/acrossthespread

Follow Blockworks: https://twitter.com/Blockworks_ 

Get top market insights and the latest in crypto news. Subscribe to Blockworks Daily Newsletter: https://blockworks.co/newsletter/

--or

Disclaimer: Nothing discussed on Market Depth should be considered as investment advice. Please always do your own research & speak to a financial advisor before thinking about, thinking about putting your money into these crazy markets.

In today’s episode, Weston Nakamura breaks down China’s latest trade data for April, which saw strong but declining export growth, and a surprise contraction in imports - and what this says about the state of the China “re-open” theme, and the broader global demand picture.

Weston also goes through the chronology of another day of speculative frenzy in Chinese financial stocks, which may have hit an intraday reversal today for downside momentum in the immediate.

Weston then discusses the Japanese equity market - which is the one major market that remains resilient against the China-led downside, as the TOPIX Index breaks a new 52-week high, and the Nikkei 225 Index approaches a key resistance level on the back of foreign inflows at massive scale.

Finally, Weston discusses Japan steelmaker JFE Holdings 14% post-earnings rally, as the management's positive outlook on steel demand from the automotive sector, driven by a normalization in the semiconductor chip supply shortage, has potential wide scale implications.

Upon returning from Golden Week holidays in Japan and China, Chinese bank shares went on an absolute tear higher, with some of the biggest lenders' stocks hitting their +10% intraday limit up on the heels of positive headlines on net interest margins. However, the bigger macro picture in China does not warrant such a historic surge in Chinese banks. Furthermore, the last time that Chinese banks hit limit up was in July 2015, followed by the historic PBOC yuan devaluation, and the subsequent cross-asset, global volatility that had ensued thereafter.

Weston Nakamura discusses today's price action in China (and indeed the world's) largest bank shares, as well as what else is ahead for this week out of Asia with global market impact and relevance.

--

Follow Market Depth On Spotify: https://spoti.fi/3mVTs9U

Follow Market Depth On Apple Podcasts: https://apple.co/40dA2vm

Follow Weston: https://twitter.com/acrossthespread

Follow Blockworks: https://twitter.com/Blockworks_ 

Get top market insights and the latest in crypto news. Subscribe to Blockworks Daily Newsletter: https://blockworks.co/newsletter/

--

Disclaimer: Nothing discussed on Market Depth should be considered as investment advice. Please always do your own research & speak to a financial advisor before thinking about, thinking about putting your money into these crazy markets.

Weston Nakamura sits down with a special guest on Market Depth: Taka Kato, former head of trading at Bitflyer, Japan's largest crypto exchange, and trader at Goldman Sachs Japan, in a wide ranging discussion of Japan markets, policy, and global impact.

Taka first gives his take on the year to date rally in Bitcoin from his vantage point at a major crypto exchange.

Weston and Taka then talk Bank of Japan policy and Governor Ueda's course of action in the near and Long term - giving Weston a revelation as to why foreign macro hedge funds insist on participating in the infamous "widow-maker" trade.

Taka and Weston also dive into the Japan investor base, responsible for the largest foreign asset holdings in the world, and their behavioral traits.

Finally, Taka gives his bullish view on the Japan equity markets.

Follow Taka Kato on Twitter at MMT2Global

https://twitter.com/MMT2Global

--

Follow Market Depth On Spotify: https://spoti.fi/3mVTs9U

Follow Market Depth On Apple Podcasts: https://apple.co/40dA2vm

Follow Weston: https://twitter.com/acrossthespread

Follow Blockworks: https://twitter.com/Blockworks_ 

Get top market insights and the latest in crypto news. Subscribe to Blockworks Daily Newsletter: https://blockworks.co/newsletter/

--

Disclaimer: Nothing discussed on Market Depth should be considered as investment advice. Please always do your own research & speak to a financial advisor before thinking about, thinking about putting your money into these crazy markets.

The RBA shocked global markets when they hiked policy rates by 25 basis points for their May policy meeting, after having just paused their aggressive rate hiking cycle in the prior meeting, in order to examine the effects of their year-long measures in tightening policy. Some will interpret the RBA's decision as a forward indicator for other major central banks' respective hiking and pausing cycles. However, Weston Nakamura discusses broader takeaways from the RBA with applications to the Fed, ECB, Bank of England, Bank of Japan, and other central bank policies.

Weston also discusses the currency markets in reaction to the RBA shock rate hike - namely the Aussie Dollar against the yen, and how the yen can serve as a useful base currency pair to read market reactions as central banks continue to release their respective policy decisions in the immediate term.

--

Follow Market Depth On Spotify: https://spoti.fi/3mVTs9U

Follow Market Depth On Apple Podcasts: https://apple.co/40dA2vm

Follow Weston: https://twitter.com/acrossthespread

Follow Blockworks: https://twitter.com/Blockworks_ 

Get top market insights and the latest in crypto news. Subscribe to Blockworks Daily Newsletter: https://blockworks.co/newsletter/

--or

Disclaimer: Nothing discussed on Market Depth should be considered as investment advice. Please always do your own research & speak to a financial advisor before thinking about, thinking about putting your money into these crazy markets.

Ever since Warren Buffett's endorsement of Japan equities during his recent visit to Tokyo, weekly data from Japan Ministry of Finance shows foreign investors have been buying the most Japan equities on record. This coincides with Japan equity indices' recent outperformance relative to its developed market majors. However, Weston Nakamura warns of a key resistance level on the horizon for the Nikkei 225 index.

Weston also discusses the surprise miss in China Manufacturing PMI, and its impact on commodities. Finally, Weston talks about the upcoming major central bank decisions for the week, and to look to the currency markets against the yen for the "cleanest" reading of market reactions.

--

Follow Market Depth On Spotify: https://spoti.fi/3mVTs9U

Follow Market Depth On Apple Podcasts: https://apple.co/40dA2vm

Follow Weston: https://twitter.com/acrossthespread

Follow Blockworks: https://twitter.com/Blockworks_ 

Get top market insights and the latest in crypto news. Subscribe to Blockworks Daily Newsletter: https://blockworks.co/newsletter/

Disclaimer: Nothing discussed on Market Depth should be considered as investment advice. Please always do your own research & speak to a financial advisor before thinking about, thinking about putting your money into these crazy markets.