Market Depth Weston Nakamura | Blockworks

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 PBOC.
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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.

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 the event of a US technical default outcome.
Weston then discusses the massive market impact on Asia shares during the trading session off of Nvidia's huge guidance beat - as Advantest, Tokyo Electron, TSMC, SK Hynix and other stocks across the Asia region rallied, and thereby lifted the Nikkei225 index back into positive territory.
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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.

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 despite the downturn in the Nikkei 225 and TOPIX indices, foreigners remain net buyers of Japan equities. Therefore, it seems that there may still be upside in Japan, and therefore in global equities on the other side of this pullback.
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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.

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.”
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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.
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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.
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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.