Discover and read the best of Twitter Threads about #HKD
Most recents (6)
1/15: I was recently called a “China Macro Tourist”, so I decided to do the following and give a chance to everyone to find out about China’s Macro reality for themselves.
Since the best way of learning is by doing, I will set a few questions so that everyone who doubts to find… twitter.com/i/web/status/1…
Since the best way of learning is by doing, I will set a few questions so that everyone who doubts to find… twitter.com/i/web/status/1…
2/15 a: We start from the GDP: China’s GDP is an input number and not an output figure like in Western economies. National accounts are based on data collected by local governments, which are rewarded for meeting growth targets; hence, local governments are incentivised to skew… twitter.com/i/web/status/1…
2/15 b: The Brookings Institution, in a research paper published in March 2019, estimated that China's GDP growth from 2008-2016 could be 1.7% (annually) lower than publicly acknowledged. I am confident China did not stop there. What happens if China’s GDP is 20% lower than most… twitter.com/i/web/status/1…
$MEGL vs $HKD PT 1: I hate when this happens. #megl #stock #cupandhandle may not be done just yet, let's begin. I began to notice the odd behavior from megl today in price action. I was curious so i began to compare #IPO's with #hkd. I noticed some rhyming... cont
$MEGL vs $HKD PT 2: Let's take a #fibonacci retracement from the first candle to the low of the day. You'll see we faced rejection @ the 1.618 ratio. Now let's take some fibs from the top of the cup to the low of the day and we can now see some higher targets that... cont 
*HONG KONG PEG DEFENSE RESERVES DWINDLING DUE TO THE HKMA’S BUYING HKD TO PROP UP THE FAILING PEG - EXCESS RESERVES DOWN 44% SINCE MAY. At the current rate of decline, peg defense reserves could be exhausted by the end of August or sooner. #HongKong #HKD #China 1/4
New fully settled excess reserve number down to 190bn HKD from 340bn in May of this year and 460bn in August 2021. Bloomberg reported today that rich Chinese investors are liquidating and attempting to flee HK and China…Chinese bank runs, property developer bankruptcies 2/4
And now cue Xi’s belligerence with Taiwan. Something big happed today with US Treasury, US Military, and several other cabinets simultaneously making strong statements against the CPC. Rumors abound regarding CPC forcing factories to a wartime footing for production. #China 3/4
🛑 Rigid Currency Pegs Break 🛑 As an update to our seminal work on Hong Kong 🇭🇰 back in 2019, conditions today (both macroeconomic and political) will likely cause the 39-yr HKD peg to the USD to be stressed enough to cause a cathartic revaluation of the HKD. Participants 1/10
have little understanding of the fragility of such rigid relationships. Pundits from the HKMA and academia frequently report the HKD currency board is a ‘perfect’ and ‘sustainable’ relationship.This self-serving market affirmation has become somewhat of a financial apostolic 2/10
Creed that’s flawed at its foundation. Today’s HKMA ‘excess reserves’ that are reportedly liquid and ready to be used to defend the 7.85 peg amount to $42.9B. HK banking deposits are $728B in USD and $965B USD worth of HKD. If only 5.8% of USD deposits leave HK 3/10
The yen is the proverbial canary in the coal mine for Asian currencies. BOJ Governor Kuroda has engaged in several “unlimited” and very public bond buying operations. Their Faustian bargain on rates has two major problems that act simultaneously against Japan: 1. Every bond 1/6
purchased by the BOJ injects that many more Yen into the system. 2. Rates differentials between other developed economies (primarily the U.S.) causes Mrs. Watanabe to immediately take those Yen and invest abroad at much higher rates (+250 bps now).The third rail and lingering 2/6
Explosive problem is confidence in the BOJ eroding daily. These ‘disorderly’ moves in the Yen break confidence in control. Market forces can turn into a panic 😱 once participants realize the yen is completely unhinged (happening now). Once lack of confidence on 3/6
#HongKong: Pressure on the #USD - #HKD peg is mounting. The rising #US interest rates have put enormous pressure on the HKD peg. This has depleted Hong Kong's excess FX reserves.
#HongKong has FX Reserves of $438bn (March 2019) plus another $6.9bn from the HKMA Exchange Fund which is there to stabilize the #HKD peg. Looking at the HKMA Exchange fund it is clear that money has been leaving HK. Since 2016 the fund has gone from $55bn to $7bn.
#HongKong M2 is currently 1,8 trillion USD. However, the total FX Reserves / M2 are only at 24%.
