A lousy Manufacturing PMI reading out of China pulled the Hang Seng index officially into bear market territory, sent the yuan crashing through 7.10, and seemed to have set off a broader, risk-off market move that reverberated across asset classes globally.  But, did yet another piece of weak economic data from China really spook global markets - particularly the previously China-resilient DM equity indices such as Japan? After all, Asia equities ex-China have been leading the world higher...

We are in the midst of key conferences for markets - from the CLSA Japan Summit in Tokyo, to A.I. focused Computex in Taiwan, to China-themed conferences by Morgan Stanley in Hong Kong and JP Morgan in Shanghai. Weston Nakamura takes a look into using these conferences as potential near term, directional turning points for markets - and presents the case for a potential larger trend reversal for a pause in upside for Japan equities, and a rebound upward in Chinese and Hong Kong equities,...

Prior to Asia markets open, major headlines came out of Washington that a debt ceiling deal had been made - and Asia equity indices, particularly in Japan, had traded positively on the day. With the US and parts of European markets closed for holiday, Asia was the only barometer of market reaction. But, just how much of the upside was due to the debt ceiling, if any? After all, China and Hong Kong had yet another down day, and the Nikkei 225 Index has been clocking in new three-decade-high...

May was the worst month for markets that have bet on the China reopen theme - and this final week was particularly bad. Weston Nakamura walks through various markets - from equities, to commodities, to fixed income, and of course, the yuan, and shows how each asset class is in agreement - the China reopen theme is dead. What's more, there is still room to the downside in many of these markets. Weston also discusses how he is framing up trading a widely expected rate cut from the...

Despite Fitch putting the US's credit rating on negative watch, global markets are largely brushing off debt-ceiling risk. Weston Nakamura comments on the knee-jerk market reaction to the Fitch headline of strength in the yen and in gold, and also provides color on how the largest foreign creditors to the United States, the Japanese institutional investors, are viewing a potential US default, and what they are doing in the US Treasury markets. Weston also provides a potential trade set up in...

After hitting new three-decade-highs day after day, Japan's incredible equity market rally finally comes to an end. Notably, Japan's market direction, both to the upside as well as down, has been driving the broader global equity markets directionally in tandem - putting in the top tick on index futures down to the minute. Weston Nakamura dives into futures markets daily trading data from Japan Exchange and analyzes exactly who was buying, and who was selling, by participant - and finds that...

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...

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...

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...

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...

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:...

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...

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...

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...

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...

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...

For a "policy unchanged" outcome in-line with consensus, Bank of Japan Governor Ueda's first monetary policy meeting was a wild day for markets. Weston Nakamura walks through the chronology of the day, starting with a major pre-announcement press leak, a delayed policy release time, and an ambiguous press conference that sent the yen tumbling sharply. Weston analyzes the methods and practices of policy communication, media, and markets, which this new leadership has seemed to embrace in a...

As we head into the first Bank of Japan policy meeting under a brand new Governor Ueda tomorrow, Tokyo-based Weston Nakamura discusses the broad consensus view of a "no policy change" outcome, as Japan CPI has moderated, and market pressures have alleviated since the March meeting. However, Weston also makes the case for why there may very well be a surprise decision to come from the Bank of Japan's new and unknown leadership- with major consequences to global markets. Here is everything you...

For Day 2 of Bank of Japan Week, Weston Nakamura explains how the Bank of Japan, through years of radical and experimental easing policy, has cornered itself against markets - both in the near term with Yield Curve Control, as well as the longer term by being forced to support the world’s most indebted nation’s fiscal sustainability.  Weston discusses the background history of how Yield Curve Control’s trading bands were crafted, and why they are a double edged sword. Finally, Weston makes...

To kick off Day 1 of Bank of Japan Week, culminating in an extremely critical first Bank of Japan meeting under new leadership in a decade, Weston first gives his takeaways on the two headlines from overnight - Sankei News’ press test of a comprehensive policy review, as well as Bank of Japan Governor Ueda’s latest comments in Parliament today. Weston then discusses just how the Bank of Japan may potentially cause major global market disruptions, particularly in the sovereign bond markets, in...

To round up a week of key global macro data out of Asia, Weston Nakamura provides his big picture take on the surprise upside beat in China GDP and retail sales, as well as an overview on the latest Japan inflation figures. Heading into Bank of Japan next week, Weston also provides additional context from the corporate angle, as credit issuers, asset managers and others prepare for the end of an era of easy money.  -- Follow Market Depth On Spotify: https://spoti.fi/3mVTs9U Follow Market...

Goldman Sachs reveals an unusually weak result from their powerhouse fixed income trading division - the only one of its peers to report year-on-year declines. This is particularly strange, given the highly volatile quarter in rates markets, which typically bodes well for Goldman's trading profits. Weston Nakamura explains how Goldman's fixed income trading miss signals a broader and far more troubling market picture - one that is being completely overlooked by market participants and...

Weston Nakamura outlines the key macro data with global macro market implications for this week - as they all stem from the Asia region. Namely - retail sales, industrial production and GDP figures from China (and why China's "fake GDP" figures are nonetheless usefully informative), and Japan CPI at the end of the week, as the country's final inflation reading before the consequential April Bank of Japan meeting. Weston also dives into the recent surge in gold prices, as spot gold nears its...

In this week's roundup of global macro and market developments, Weston Nakamura flags key points from the World Bank & IMF Spring Meetings held in Washington D.C. this week, as IMF projects Asia to contribute to 70% of global growth for this year, Bank of Japan's brand new Governor Ueda and his first comments on policy to his global peers, and a surprising one-on-one meeting between China's central bank head and Fed Chair Powell. Weston also discusses Softbank divesting the last of its...

As global markets await the US CPI release for March 2023, Weston Nakamura shares a trade that he has opened this week: Long USDJPY, with the data drop as a potential market moving catalyst. Weston discusses his framework for the trade- including the unique market stance of having last Friday's US Nonfarm Payrolls data mixed into the CPI reaction, the rate markets' setup which parallels that of the 2022 Yield Curve Control environment, and broader market positioning. This is an opportunity to...