This is not meant to be political, or financial advice... Just a scenario to entertain.
It is my hypothesis that China is leading the world economy, and other economies are acting as derivatives...
China is positioned for a downturn, and they are the least financially leveraged out of the major economies in their pandemic response. Others markets will follow, but with greater volatility!
Possible paths for SSE 100, DJI, US10Y, and (Crypto) Total MCap.
As always, GLHF! - DPT
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Credits to @OptionsRising for the lead on comparing global markets
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@OptionsRising's idea with correlation between USDCNY and crypto markets. I give him full credit:
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China warns of global asset bubble, as their credit impulse turns negative.
"As a reminder, the global economic cycle has become somewhat synonymous with China’s credit impulse over the years. Ironically, a pandemic that began on Chinese soil provided the impetus for a serious infrastructure push in the US. If Joe Biden’s fiscal proposals are enacted, it could mean that, at least for the next few years, the global economy will turn on the fiscal impulse in Washington rather than the Chinese credit cycle."
Keep up the good work and post more analysis! need my daily fix :D
UnknownUnicorn1043646
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@eshtaellaly, Thank you for the kind words and continued support!
OptionsRising
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According to your chart, the blue line is the only one that has turned lower, and that is China. So if your idea is correct then US markets, crypto, and others would follow suit. Today's Fed announcement on how they handle bank reserves and Treasury balances - whether or not Fed extends SLR (supplementary leverage ratio) - is all the bond market and big global banks care about right now. If the exemption is not extended and the usual SLR policy returns to effect, then yields will rise and - for trading - QQQ and all hypervalued stocks will fall. Otherwise, if yields start moving lower due to Fed policy, such as extending the SLR exemption for Treasuries, then the market will rally again.
UnknownUnicorn1043646
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@OptionsRising, Please see my other ideas, if you want a full detailed analysis of the fundamentals and technical research I have done: