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Off And Running.

"Equities are 'foaming at the mouth' to start the week"...

On Sunday, we gently suggested that upbeat PMI data out of China was likely to triumph over all other concerns when it came to stoking risk appetite to start the new week. Once the Caixin PMI "confirmed" what the official print seemed to be saying about a possible bottoming in the Chinese economy, overseas equities had the green light. Long story short, it was off to the proverbial races to start Q2, as Chinese equities soared more than 2.5%, while Hong Kong shares logged similarly outsized gains (surging into a bull market in the process). The ChiNext rose a ridiculous 4% on the session, bringing the gauge of small caps and tech share's YTD gain to a truly absurd ~40%, while 10-year yields in China jumped 8bps on the day. "Equities are 'foaming at the mouth' to start the week following the weekend release of Chinese Manu PMIs, with both 'official' and Caixin reaccelerating into expansionary territory indicating that policy easing begun last year is now beginning to positively impact growth again", Nomura's Charlie McElligott writes, before sounding a cautious tone courtesy of his colleague Ting Lu quoted by Charlie as follows: The rise in the March PMI and incoming a
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2 comments on “Off And Running.

  1. Nate says:

    sell in May and go away ???

  2. George says:

    When the student (China) learns to move the goalposts as well as the master we have a setup for another 2008-9 disaster. Charlie’s flow based analysis is right on , but deals with inanimate machines that dictates to a greed based forces. An absurd scenario prevails that has the capability to tip the tilting boat on moments notice …(well , because it’s tilting ,of course).. always when you least expect expect .It’s like the little boy who cried Wolf all over again.

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