Data discoveries of the week. From data comparing interest rates pre and post Covid, the Yen, Yuan and Euro collapse against the Dollar, China’s market conditions after the 20th National Congress and more, this week’s market stories are full of insights on major events around the globe.
1. India Govt. Bond yield curves
Interest rate curves in the Pre-during-Post Covid phases
1) pre-Covid: moderately high rates, upward sloping curve
2) as Covid hit: inflation collapsed, aggressive rate cuts, curve steepened & moved down
3) NOW post-Covid: high inflation, aggressive tightening, curve flattened pic.twitter.com/z7vOqdPzxf— Mihir Vora (@theMihirV) October 16, 2022
2. Last week, China held the the 20th National Congress of Communist Party, the market response to the event was quite drastic.
Markets immediately give direct feedback on what they think of China after the National Congress: China’s Yuan weakens past 7.3 per Dollar an all-time low since the unit started trading in 2010. pic.twitter.com/ytiRfQsVlV
— Holger Zschaepitz (@Schuldensuehner) October 24, 2022
3. There is an outflux of foreign investors from the mainland market creating a panic selling situation.
“The Hong Kong market is seeing a panic selling moment.” https://t.co/fdw5daYbz6 pic.twitter.com/Tv6Kuk8TdQ
— Lisa Abramowicz (@lisaabramowicz1) October 24, 2022
4. Europe and the US are experiencing a shortage of natural gas. The prices astonishingly went to negative in Europe and the state of Texas in the US.
European next-hour natural gas prices just went negative. ?
Not even “free gas”, you actually get paid to burn it. Because, just like oil during COVID, storage is full. Chart from @JanVonGerich
Just as the doomsters predicted ? pic.twitter.com/jYqJEUokL4
— Wasteland Capital (@ecommerceshares) October 24, 2022
5. Euro zone recession seems likely with composite PMI falling to 47.1%.
European manufacturing is starting to look really ugly. The forward-looking orders – inventories (blue) in the flash October PMIs is deeply negative in the Euro zone (top left), the UK (top right), Germany (bottom left) & France (bottom right). Deep Euro zone recession is coming. pic.twitter.com/LE6GQiWNbi
— Robin Brooks (@RobinBrooksIIF) October 24, 2022
6. The foreign exchange market is expected to be volatile this week.
The yen, yuan and euro collapse against the US Dollar show how a modest rate hike destroys the narrative of the joys of endless printing.
Graph via Bloomberg pic.twitter.com/Q98IDkPSPz
— Daniel Lacalle (@dlacalle_IA) October 25, 2022
7. House prices have fallen in nine of the richest economy. The market boom is expected to end soon.
The Housing Market boom is coming to an end
"In Canada & Sweden they have fallen by more than 8% since February; in New Zealand they have fallen by more than 12% since their peak last year"
Risks still remain. Here's a chart from the Economist ranking the most exposed countries pic.twitter.com/awK5fUn2Oy
— Ayesha Tariq, CFA (@AyeshaTariq) October 24, 2022
8. The mortgage business has also fallen significantly due to the rise in interest rates.
The mortgage refinance business has collapsed by 85% from a year ago, to the lowest level since the year 2000 ? ? ?
Housing market is already mostly frozen.
Two more rate hikes will put it into a coma by December. ?? pic.twitter.com/6iFtkmwPVt
— Wall Street Silver (@WallStreetSilv) October 24, 2022
9. Global mutual funds/ETF off-loading US FI assets.
Every week, we crunch thousands of alt data and capital flow time series @ExanteData.
While there is a lot of focus of central banks selling of US bonds, there are other sellers worth watching. Here is data from global mutual funds/ETFs. They are also off-loading US FI assets. pic.twitter.com/yRwu536XtN
— Jens Nordvig ?????? (@jnordvig) October 22, 2022
10. Back to the humble SIP, the data has spoken yet again. Consistency, over timing.
On what date should I do my SIP?
Last 10 years' data says literally any date in a month. Just choose one date and do a monthly SIP.
Most important thing is not to stop your SIP for next 10-15 years. That's how you create wealth.#MutualFunds #investing #SIP pic.twitter.com/lXsLV7LLqd
— Save Invest Repeat ? (@InvestRepeat) October 16, 2022
11. Who holds how much of Indian Treasury Bill?
Infographic: Treasury Bills – Who owns how much?
? Commercial Banks: 53.14%
? Mutual Funds: 14.86%
?Insurance Cos.: 5.34%
? Corporates: 4.72% pic.twitter.com/fmvWZkB4kW— FinMedium.com – Investing Made Easy (@FinMedium) October 18, 2022
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