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Recent IPO AI surged past a 160.53 buy point from an IPO base. The 5% chase zone extends to 168.56.
Recent IPO AI surged past a 160.53 buy point from an IPO base. The 5% chase zone extends to 168.56.
(Bloomberg) -- A rapid souring in financial markets on Monday highlights how even the most positive news for the world economy is no fillip to risk assets weighed down by the anchor of the global bond market.Such is their sensitivity to rising Treasury yields, the weekend approval of a $1.9 trillion U.S. stimulus package and data showing a surge in China’s exports sent stocks and equity futures lower Monday. Other risk-sensitive assets from the Korean won to Indonesian bonds retreated, and technology shares underperformed as the 10-year Treasury yield edged back up toward 1.60%.“Profit taking is not over yet, given that the yield continues rising and investors have become cautious,” said Jackson Wong, Hong Kong-based asset management director at Amber Hill Capital Ltd. “The 10-year bond yield at around 1.6% is not good for asset valuations and there is no prospect that the yield increase will stop in the near-term.”Improving data and the imminent passing of the second-biggest stimulus program in U.S. history has turned optimism about a recovery into fears of an overheating economy triggering sooner-than-expected rate hikes. The very measures policy makers have been pushing to fight the pandemic are now fueling volatility in bond and equity markets and spurring a rethink of stretched valuations in assets across the world.“The near-term risk is that we see 10-year yields continuing to push higher toward 2%,” said Khoon Goh, head of Asia research at Australia & New Zealand Banking Group in in Singapore. “That will see a further adjustment in asset prices that had previously benefited from low yields.”Man Group Plc has warned emerging-market debt is nearing a tipping point as U.S. yields climb, while BlackRock Inc. said there was no immediate end in sight to a bond selloff that has drawn comparisons with the 2013 taper tantrum.For Sue Trinh, managing director for global macro strategy at Manulife Investment Management, the key market to watch now is credit, which has remained relatively unshaken amid broad financial conditions that are still easy.Among the key moves in markets on Monday:The MSCI Asia Pacific Index lost 0.7%, falling for a third-straight sessionKorea’s won dropped to the weakest since NovemberYields on 10-year Indonesian bonds, a bellwether for Asian risk assets, jumped 15 basis points to 6.84% -- the highest since OctoberThe Bloomberg Dollar Spot Index reversed losses to trade 0.1% higher, extending last week 0.9% advanceWhile the U.S. stimulus package needs to go back to the House for a final vote expected Tuesday, economists are already boosting their forecasts for growth. And though an advance in Treasury yields is often seen as a sign of economic strength, the pace of the move has sparked concern about a disorderly spiral downwards in bond prices.“Momentum is strong in the bond selloff,” said Manulife’s Trinh. “We are in Fed blackout now for the next week and the risk is that momentum takes on a life of its own.”(Rewrites throughout)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
(Bloomberg) -- India’s record foreign-exchange reserves and a rare current-account surplus look set to cushion the nation’s currency and bonds from a global surge in interest rates.While the central bank does have its hands full managing the government’s large debt issuance, strategists see the country in a much stronger financial position now than it was during previous bouts of turmoil in world markets. They cite the rupee, which has eked out a gain this year, defying the slump seen in most emerging-market currencies, and relative stability of India’s bonds.With reserves closing in on $600 billion and a current-account surplus forecast to exceed 1% of gross domestic product, talk of India as one of five fragile emerging markets has mostly faded away. When the description was coined during the taper tantrum in 2013, inflation in India was running at around 10%.Data due March 12 is projected to show consumer prices rising at less than half that level, and well below the 6.6% average of last year. Meanwhile, benchmark 10-year bond yields have largely been capped since last year by the central bank and the nation’s stocks continue to see foreign inflows.“India’s markets are likely to be relatively immune to higher U.S. yields in the weeks ahead,” said Mitul Kotecha, chief EM Asia and Europe strategist at TD Securities Ltd. in Singapore. “India has been a key beneficiary of equity inflows into Asia and we do not see outflows persisting.”Ahead of the CPI figures, here is a series of charts highlighting points of strength in India that have been cited by analysts.Stock InflowsIndian stocks have attracted about $6 billion of foreign inflows this year, the highest in emerging Asia after China, and well above those of the country’s erstwhile “Fragile Five” peers. The prospect of strong economic growth has been underpinned by an early start to India’s coronavirus inoculation campaign, aided by domestically produced vaccines.FX ReservesIndia’s central bank has added $127 billion to its foreign-exchange kitty since the beginning of January last year, the biggest increase among major Asian economies. At the current rate of accumulation, India is on course to pass Russia and take fourth place in global rankings for reserves, behind China, Japan and Switzerland. This large well of reserves should give authorities fire power to deal with any potential capital outflows driven by external shocks, according to Kaushik Das, chief India economist at Deutsche Bank AG in Mumbai.Current AccountIndia is expected to post a current-account surplus of 1.1% of GDP in the current fiscal year, along with a balance-of-payments surplus of $96 billion, according to Emkay Global Financial Serviced Ltd. While the current account may swing back to a small deficit next fiscal year, healthy capital flows may keep the balance of payments positive to the tune of $45-50 billion, helping to support the rupee, according to Madhavi Arora, lead economist at Emkay.Bond ReturnsIndia’s sovereign bonds offer more stable returns than many others in emerging markets, as measured against annualized 60-day volatility in benchmark 10-year securities. The Reserve Bank of India has made over 3 trillion rupees ($41 billion) of bond purchases this fiscal year and plans to buy at least that amount next year, according to RBI Governor Shaktikanta Das, which should help to curb gains in yields.Economic GrowthIndia’s economy is projected by the International Monetary Fund to grow 11.5% in 2021, a pace that is likely to be the fastest of any major economy, which also augurs well for inflows and the rupee.Below are are the key Asian economic data and events due this week:Monday, March 8: Japan balance of paymentsTuesday, March 9: South Korea balance of payments, Japan GDP, Australia NAB Business Confidence, Taiwan CPIWednesday, March 10: China CPI, PPI; RBA’s Lowe gives speech in SydneyThursday, March 11: New Zealand food prices and house sales, Japan PPIFriday, March 12: Philippines trade, India Feb. CPI and Jan. industrial production, Thailand forex reserves, Malaysia industrial productionFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
A growing semiconductor shortage could hamstring the EV boom in 2021. Here’s who could profit in the days ahead
Shares of Hong Kong-listed Chinese photo editing app Meitu Inc rose as much as 14.4% on Monday morning after the company said it had bought $40 million of cryptocurrencies. The beauty-focussed technology firm said in a Sunday evening exchange filing that it bought $22.1 million worth of Ether, the world's second-largest cryptocurrency by market capitalisation, and $17.9 million worth of Bitcoin on March 5. Meitu is the latest company to say it will hold cryptocurrencies as part of its treasury operations.
To win Senate passage, Biden agreed to make millions ineligible for the third checks.
And will you even get a payment this time, under the new limits the president agreed to?
The top cryptocurrency is changing hands near $50,500 at press time, representing a 4% gain on the day, having clocked a high of $51,320 early today, according to CoinDesk 20 data.
U.S mortgage rates climb back through to 3% levels for the first time since July. Further increases will begin to test buyer demand on a more significant scale…
The bill that passed the Senate makes payments harder to get. Your tax return might help.
We could see profit-taking this week as traders prepare for the release of the U.S. Federal Reserve’s monetary policy decisions on March 17.
(Bloomberg) -- It’s not just in meme stocks that the fate of short sellers is a key theme. Short bets are increasingly in vogue in the $21 trillion Treasuries market, with crucial implications across asset classes.The benchmark 10-year yield reached 1.62% Friday -- the highest since February 2020 -- before dip buying from foreign investors emerged. Stronger-than-expected job creation and Federal Reserve Chair Jerome Powell’s seeming lack of concern, for now, with leaping long-term borrowing costs have emboldened traders. In one telltale sign of which way they’re leaning, demand to borrow 10-year notes in the repurchase-agreement market is so great that rates have gone negative, likely part of a move to short the maturity.The trifecta of more fiscal stimulus ahead, ultra-easy monetary policy and an accelerating vaccination campaign is helping bring a post-pandemic reality into view. There are of course risks to the bearish bond scenario. Most prominently, yields could rise to the point that they spook stocks, and tighten financial conditions generally -- a key metric the Fed is focused on for guiding policy. Even so, Wall Street analysts can’t seem to lift year-end yield forecasts fast enough.“There’s a lot of tinder being put now on this fire for higher yields,” said Margaret Kerins, global head of fixed-income strategy at BMO Capital Markets. “The question is what is the point that higher yields are too high and really put pressure on risk assets and push Powell into action” to try and tamp them down.Share prices have already shown signs of vulnerability to increasing yields, especially tech-heavy stocks. Another area at risk is the housing market -- a bright spot for the economy -- with mortgage rates jumping.The surge in yields and growing confidence in the economic recovery prompted a slew of analysts to recalibrate expectations for 10-year rates this past week. For example, TD Securities and Societe Generale lifted their year-end forecasts to 2% from 1.45% and 1.50%, respectively.Asset managers, for their part, flipped to most net short on 10-year notes since 2016, the latest Commodity Futures Trading Commission data show.Auction PressureIn the days ahead, however, BMO is eyeing 1.75% as the next key mark, a level last seen in January 2020, weeks before the pandemic sent markets into a chaotic frenzy.A fresh dose of long-end supply next week may make short positions even more attractive, especially after record-low demand for last month’s 7-year auction served as a trigger to push 10-year yields above 1.6%. The Treasury will sell a total of $62 billion in 10- and 30-year debt.With expectations for inflation and growth taking flight, traders are signaling that they anticipate the Fed may have to respond more quickly than it’s indicated. Eurodollar futures now reflect a quarter-point hike in the first quarter of 2023, but they’re starting to suggest that it could come in late 2022. Fed officials have projected they’d keep rates near zero until at least the end of 2023.So while the market is leaning toward loftier yields, the interplay between bonds and stocks is bound to be a huge focus going forward.“There’s definitely that momentum, but the question is how well risky assets adjust to the new paradigm,” said Subadra Rajappa, head of U.S. rates strategy at Societe Generale. “We’ll be watching next week, when the dust settles after the payrolls data, how Treasuries react and how risky assets react to the rise in yields.”What to WatchThe economic calendarMarch 8: Wholesale trade sales/inventoriesMarch 9: NFIB small business optimismMarch 10: MBA mortgage applications; CPI; average weekly earnings; monthly budget statementMarch 11: Jobless claims; Langer consumer comfort; JOLTS job openings: household change in net worthMarch 12: PPI; University of Michigan sentimentThe Fed calendar is empty before the March 17 policy decisionThe auction calendar:March 8: 13-, 26-week billsMarch 9: 42-day cash-management bills; 3-year notesMarch 10: 10-year notesMarch 11: 4-, 8-week bills; 30-year bondsFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
(Bloomberg) -- Apple Inc. has slumped 15% since late January. Tesla Inc. has lost more than a quarter-trillion dollars in market value in three weeks. And more than $1.5 trillion has been wiped off the Nasdaq 100 in less than a month.And yet, none of it has been enough to rattle the retail investor.Instead, to borrow a Reddit phrase describing bullish gumption, they’ve had diamond hands. Since the market peaked a few weeks ago, retail traders have plowed cash into U.S. stocks at a rate 40% higher than they did in 2020, which was a record year. They’re opting for parts of the market that have suffered the most, doubling down in arguably risky ways with triple-leveraged tech funds and options galore.A year out from the Covid-19 stock crash, with individual traders now making up nearly a quarter of U.S. volume on any given day, battle lines are forming. Some of the favored speculative bets that minted money on the way up -- electric-vehicle stocks, special purpose acquisition companies and green energy plays to name a few -- are the same securities that are buckling now as bond yields rise.Retail traders, many of them newbie investors, have consistently held strong, buying virtually every dip during what’s been the best start to a bull market in nine decades. But now the world is wondering how much it’ll take for them to call it quits, especially after a year in which retail traders were right way more often than wrong.“Historically it’s been a bad signal that retail investors are piling into the market and a signal of a top,” said Arthur Hogan, chief market strategist at National Securities Corp. “And every time we tried to call a top in 2020 because of retail participation, it was wrong.”As stocks swooned over the last three weeks, retail investors snapped up an average of $6.6 billion in U.S. equities each week, according to data from VandaTrack, an arm of Vanda Research that monitors retail flows in the U.S. market. That’s up from an average $4.7 billion in net weekly purchases in 2020.They’ve doubled down on areas of the market that have been hit the hardest. Apple, which has plunged 15% since late January, was the most-popular retail buy this past week. NIO Inc., the electric-vehicle maker down almost 40% since Feb. 9, was the second-most popular. Next up were exchange-traded funds tied to the Nasdaq 100, the Invesco QQQ Trust Series 1 (ticker QQQ) and a triple leveraged version (ticker TQQQ).On Thursday, when the Nasdaq 100 fell as much as 2.9%, almost 32 million bullish call options traded across U.S. exchanges, the fifth-most on record. The other four have all occurred within the last four months.Equity ETFs added almost $7 billion of fresh money during the first four days of March, building on a record $83 billion that flooded in last month, data compiled by Bloomberg Intelligence show. In fact, even before March began, flows into U.S.-listed ETFs were off to their best start to a year on record, out-pacing the prior best start -- which was in 2017 -- by over 74%, according to Matt Bartolini, State Street Global Advisors’ head of SPDR Americas Research.“There’s a lot of excess liquidity and we just had this $600 check going to many families in January,” said Jimmy Chang, chief investment officer of Rockefeller Global Family Office. “We’re going to get an additional liquidity injection in the $1,400 check and part of that money is going into risk assets.”Karim Alammuri, a 31-year-old marketing strategy manager, is one of many retail investors who’s been snapping up stocks. In recent days, he bought shares of fuboTV Inc. and SPAC Churchill Capital Corp IV. Fubo TV has plunged more than 50% since a December peak. Churchill Capital has lost almost 60% of its value in 11 trading sessions.“I plan on sticking around because I don’t want to take a loss,” he said by phone from New York. “A lot of very attractive stocks are on crazy discount right now, so I’m just looking to see how I can re-shuffle things to be able to buy them.”With an army of retail investors standing ready to buy any dip, those declines have grown shallower and shallower. The S&P 500 has gone without a 5% pullback since early November, or 83 straight days, the longest streak in a year.The end result of persistent dip buying is a market with little downside. At its lowest closing level of 2021, the S&P 500 was only down 1.5% year-to-date. That’s the smallest drawdown at this time of a year since 2017.If past is precedent, that could mean the sell-off has more room to run. Retail investors tend to buy the initial dips, and it’s not until they capitulate and sell that markets ultimately bottom, according to Eric Liu, co-founder and head of research at Vanda Research. The firm’s data show that was the case in both selloffs in 2018, as well as roughly a year ago during the Covid crash.To Victoria Fernandez, chief market strategist for Crossmark Global Investments, their continued presence in the markets likely means elevated volatility will persist. Still, that doesn’t mean retail investors’ efforts are misguided.“Is there some dumb money in retail trades? Yes. But not all of it,” she said. “Some of these people are doing their homework, looking for opportunities and trying to take advantage of it. Some win, some lose -- it’s really not that different than what professionals do on an institutional basis.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
Friday’s price action suggests the direction of the March U.S. Dollar Index on Monday will be determined by trader reaction to 92.310.
(Bloomberg) -- Barclays Plc economists expect several developing nations to see “some tangible benefits” of the International Monetary Fund’s proposal to allocate $500 billion in reserve assets known as special drawing rights.The IMF’s chief said earlier this month that the institution is proceeding with work on the plan after the Group of 20 urged it to propose a fresh allocation of the fund’s reserve assets.Emerging-market countries will probably account for “no more than” $206 billion of the new SDR allocations, Barclays economists including Ercan Erguzel said in a report to clients.Bahrain could exchange its SDR holdings with Saudi Arabia to boost reserves, according to BarclaysThe distribution may also benefit Turkey, “where the central bank aims to reverse the downtrend in reserves”Barclays estimates that Zambia’s additional allocation could reach around $1.1 billion, or some 6% of gross domestic product, “thus placing the country in a less fragile position as it embarks on its debt restructuring talks”Countries including Egypt and South Africa also stand to gain from the increase in reservesFor South Africa, Barclays estimates that its foreign-exchange holdings may be boosted by the equivalent of some $3.2 billionThe government “could in fact come to some arrangement” with the South African Reserve Bank where the central bank “keeps the SDRs but Treasury liquidates an equivalent amount from its excess reserves at the SARB to fund its external borrowing commitments for the year”Momentum has been building for the injection of funds after U.S. Treasury Secretary Janet Yellen leaned toward supporting the action, reversing opposition last year under President Donald Trump. Her predecessor, Steven Mnuchin, blocked the move in 2020, saying that because reserves are allocated to all 190 members of the IMF in proportion to their quota, some 70% would go to the G-20, with just 3% for the poorest developing nations.“The Covid-19 pandemic has morphed into a global health crisis, necessitating closer global policy coordination to rein in infection spread,” the Barclays economists said in the note. “This has brought the IMF’s role as global ‘firefighter’ back to the centre stage.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
(Bloomberg) -- Oil soared past fiscal breakeven prices for the Middle East’s four biggest producers after OPEC+ kept output largely unchanged and an attack on a highly protected Saudi Arabian oil facility.The late Sunday attack on an oil storage tank farm sent the global crude benchmark above $70 a barrel, days after the shock move by the OPEC+ cartel sparked a rally.If oil prices stay at current levels, “we would see fiscal surpluses for the larger Gulf Cooperation Council economies,” said Monica Malik, chief economist at Abu Dhabi Commercial Bank. “This provides more fiscal space to support economic activity and recovery.”Analysts at Goldman Sachs Group Inc. and JPMorgan Chase & Co. raised their Brent price forecasts after the OPEC decision.On Monday, Dubai-based lender Emirates NBD PJSC revised its average oil price upward to $67.50 per barrel this year, leading to narrower budget deficits, “assuming spending remains unchanged and governments continue to prioritize deficit reduction over boosting growth.”Budget deficits in the Arab Gulf, where economies are reliant on oil, widened after prices crashed in 2020. OPEC+ agreed last year to take about 10% of global supply off the market to stem the plunge. While the group has slowly rolled back some of those cuts, it is curtailing more than 7 million barrels of daily production.Still, Brent prices have averaged just below $60 so far this year -- below the breakeven level for most Gulf countries. Saudi Arabia, the Arab world’s largest economy and OPEC’s biggest producer, has posted successive budget shortfalls in the past seven years, a trend the International Monetary Fund predicted would continue through 2024.And the OPEC+ decision may be eroded.“Compliance with OPEC restrictions may deteriorate, resulting in a smaller decline in average crude oil production this year relative to 2020,” wrote Khatija Haque, head of research and chief economist at Emirates NBD. “OPEC+ may decide to increase production more aggressively later this year, and governments could choose to increase spending to support the economic recovery in the non-oil sectors this year.”(Updates with missile attacks on Saudi facility from first paragraph, Emirates NBD report in fifth.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
Commentary last week reported currency pairs EUR/USD 1.2061, AUD/USD 0.7657 and USD/CAD 1.2783 were located in crucial positions to determine much lower on a break or hold and travel higher. EUR/USD broke and traded 169 pips lower to 1.1892.
(Bloomberg) -- Long before Credit Suisse Group AG was forced to wind down a $10 billion group of funds it ran with financier Lex Greensill, there were plenty of red flags.Executives at the bank knew early on that a large portion of the assets in the funds were tied to Sanjeev Gupta, a Greensill client whose borrowings were at the center of a 2018 scandal at rival asset manager GAM Holding AG. They were also aware that a lot of the insurance coverage the funds relied on depended on a single insurer, according to a report. Credit Suisse even conducted a probe last year of its funds that detected potential conflicts of interest, yet failed to prevent their collapse months later.On Friday, the bank finally pulled the plug and said it would liquidate the strategy, a group of supply chain finance funds for which Greensill had provided the assets and which had been held up as a success story. The funds, which have about $3.7 billion in cash and equivalents, will start returning most of that next week, leaving about two-thirds of investor money tied up in securities whose value may be uncertain.The decision caps a dramatic week that started when Credit Suisse froze the funds after a major insurer for its securities refused to provide coverage on new notes. The move sent shock waves across the globe, prompted Greensill Capital to seek a buyer for its operations, and forced rival GAM Holding AG to shutter a similar strategy. For Credit Suisse and its new Chief Executive Officer Thomas Gottstein, it’s arguably the most damaging reputational hit after an already difficult first year in charge.While the financial toll on the bank may be limited, fund investors are left with about $7 billion locked up in a product that was presented as a relatively safe but higher-yielding alternative to money markets.The Greensill-linked funds were one of the fastest-growing strategies at Credit Suisse’s asset management unit, attracting money from yield-starved investors in a region that had for years had to contend with negative interest rates. The bank started the first of the funds in 2017, but they really took off in 2019, the year rival asset manager GAM finished winding down a group of bond funds that had invested a large chunk of their money in securities tied to Greensill and one of his early clients, Gupta’s GFG Alliance.The Credit Suisse funds, too, were heavily exposed to Gupta early on. As the bank ramped up the strategy, the flagship supply-chain finance fund had about a third of its $1.1 billion in assets in notes linked to Gupta’s GFG Alliance companies or his customers as of April 2018, according to a filing.Credit Suisse executives were aware but denied at the time that it was an outsized risk, according to people familiar with the matter. They argued that most of the loans were to customers of Gupta and not directly to GFG companies, the people said, asking not to be identified because the information is private.Over time, the proportion of loans linked to GFG and customers appeared to decrease, while new counterparties popped up in fund disclosures that packaged loans to multiple borrowers -- making it harder to determine who the ultimate counterparty is. Many of the vehicles were named after roads and landmarks around Lex Greensill’s hometown in Australia.The executives in charge of the fund also knew that much of the insurance coverage they relied on to make the funds look safe was dependent on just a single insurer, according to the Wall Street Journal. They considered requiring the funds to secure coverage from a broader set of insurers, with no single firm providing more than 20% of the coverage, but never put the policy in place, the newspaper said.A spokesman for Credit Suisse declined to comment.Greensill, meanwhile, was looking for new ways to fuel the growth of his trade finance empires after the collapse of the GAM funds removed a major buyer of his assets. In 2019, SoftBank Group Corp. stepped in, injecting almost $1.5 billion through its Vision Fund to become Greensill’s largest backer. It also made a big investment in the Credit Suisse supply chain finance funds, putting in hundreds of millions of dollars, though the exact timing isn’t clear.Over the course of 2019, the flagship fund more than doubled in size, but soon questions arose about the intricate relationship between Greensill and SoftBank that fueled the growth. The funds had an unusual structure in that they used a warehousing agreement to buy the assets from Greensill Capital, with no Credit Suisse fund manager doing extensive due diligence on them. Within the broad framework set by the funds, the seller of the assets -- Greensill -- basically decided what the funds would buy.Credit Suisse started an internal probe that found, among other things, that the funds had extended large amounts of financings to other companies backed by SoftBank’s Vision Fund, creating the impression that SoftBank was using them and its sway over Greensill to prop up its other investments. SoftBank pulled its fund investment -- some $700 million -- and Credit Suisse overhauled the fund guidelines to limit exposure to a single borrower.Neither Gottstein nor Eric Varvel, the head of the asset management unit, or Lara Warner, the head of risk and compliance, appeared to see a need for deeper changes. The bank reiterated it had confidence in the control structure at the asset management unit.Credit Suisse’s review didn’t mention at the time that Greensill had also extended financing to another of his backers, General Atlantic. The private equity firm had invested $250 million in Greensill Capital in 2018. The following year, Greensill made a $350 million loan to General Atlantic, using money from the Credit Suisse funds, according to the Wall Street Journal. The loan is currently being refinanced, said a person familiar with the matter.A spokeswoman for General Atlantic declined to comment.Shortly after the Credit Suisse probe concluded, more red flags popped up. In Germany, regulator BaFin was looking into a small Bremen-based lender that Greensill had bought and propped up with money from the SoftBank injection. Greensill was using the bank effectively to warehouse assets he sourced, but BaFin was worried that too many of the those assets were linked to Gupta’s GFG -- a risk that the Credit Suisse’s managers, for their part, had brushed off earlier.SoftBank, meanwhile, was quietly starting to write off its investment in a stunning reversal from a bet it had made only a year earlier. By the end of last year, it had substantially written down the stake, and it’s considering dropping the valuation close to zero, people familiar with the matter said earlier this month.Credit Suisse, however, was highlighting the success of the funds to investors. Varvel, the head of asset management, listed them in a Dec. 15 presentation as an example of the “innovative” and “higher-margin” fixed-income offerings that the bank was planning to focus on.By that time, Greensill already knew that a little-known Australian insurer called Bond and Credit Company had decided not to renew policies covering $4.6 billion in corporate loans his firm had sourced. The policies were due to lapse on March 1, prompting a last-ditch effort from the supply-chain firm to take the insurer to court in Australia. That day, a judge in Sydney struck down Greensill’s injunction, triggering the series of events that have since reverberated around the world.Credit Suisse didn’t know until very recently that the insurance was about to lapse, according to a person with knowledge of the matter.In an update to investors Tuesday, Credit Suisse said that several factors “cumulatively” led to the decision to freeze the funds, and that it was looking for ways to return cash holdings. But in a twist that may complicate the liquidation of the remainder, it also said that Greensill’s German Bank was one of the insured parties and plays a role in the claims process, and that bank was just shuttered by BaFin.Many of the assets in the funds have protection to make them more appealing to investors seeking an alternative to money market funds. Yet the second-biggest of them, the High Income Fund, doesn’t use insurance. It’s also the fund with the least liquidity, with less than 20% of the net assets in cash.Credit Suisse has said it wasn’t aware of any evidence suggesting financial irregularities with the papers issued by Greensill or by the underlying companies. The bank still hasn’t commented on how many of the assets in the funds are tied to Gupta’s GFG Alliance.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
(Bloomberg) -- The prospect of rising inflation and U.S. Treasury yields may damp emerging-market sentiment, even as encouraging Chinese trade data point to a speedier global recovery from last year’s lockdown.Exports from the world’s second-biggest economy soared in the first two months of the year, data showed Sunday, reflecting a recovery in external demand and providing a much-needed boost for risk assets after a turbulent start to March. Meantime, the U.S. Senate passed a $1.9 trillion stimulus package Saturday that may offer an additional spur to countries such as Mexico whose economies are most sensitive to U.S. growth.Emerging-market stocks were close to a two-month low on Monday and anxiety remains high in the bond market after Federal Reserve Chairman Jerome Powell’s dovish message last week stopped short of trying to rein in the surging yields. An index of dollar-denominated debt in the developing world dropped for a fourth week in its longest losing streak since 2018. Local-currency notes also declined amid selloffs from Poland to Hungary and Mexico.“All fixed-income assets face a challenging market as rates and inflation become more of a threat,” said Abdul Kadir Hussain, Dubai-based head of fixed-income asset management at Arqaam Capital. “Emerging markets are no different. We have already seen outflows from emerging-market fixed-income funds, and I suspect that will continue in the near term.”Inflation data this week will offer evidence of whether that caution is merited. Economists expect consumer prices to have picked up in places such as Taiwan, India and Brazil. Elsewhere, Peruvian policy makers will probably keep the key interest rate at a record low of 0.25%.Listen to the EM Weekly Podcast: Improving China Data; Rising Treasury YieldsInflation WatchTaiwan’s consumer prices probably rose last month after declining in January, according to a Bloomberg survey before the report on Tuesday. Export figures the same day may reveal growth slowed in February after the island exported a record the previous monthThe improving global trade outlook and backdrop for exports will probably buoy the Taiwan dollar, according to Gao Qi, a currency strategist at Scotiabank in SingaporeIndia’s consumer-price inflation probably accelerated further above the central bank’s 4% target, a Bloomberg survey showed. That could limit its capacity to keep monetary conditions accommodativeThose figures may put further upward pressure on Indian bond yields, which are already at a 10-month highA reading of Brazil’s February consumer-price inflation on Thursday will be the last before the central bank meets later this month to decide on the key policy rateEconomists expect that inflation climbed last monthMexico’s February inflation probably increased amid higher non-core prices, data on Tuesday may showArgentina is likely to report another month of high inflation when it releases February figures on ThursdayInvestors will also monitor Chile’s February inflation data on Monday, which will probably be slightly above the midpoint of the 3% +/-1 percentage point target, according to Bloomberg EconomicsKey DataChinese data due this week will provide another update on the nation’s economy after authorities announced a conservative growth target for this year at the National People’s Congress on FridayAfter containing the pandemic and becoming the only major economy to expand in 2020, officials now want to address imbalances such as a dependence on investment in property and infrastructure funded by corporate debtOn Sunday, Chinese Foreign Minister Wang Yi warned the U.S. to stop “crossing lines and playing with fire” when it comes to Taiwan, which Beijing claims sovereignty overAggregate financing numbers for February due between March 9 and 15 may show a slowdown due to seasonal factors. Inflation figures on Wednesday are expected to show consumer prices dropped for a second month in February, further enhancing the allure of Chinese bondsBrazil’s January economic activity and retail sales figures will also be released next week, offering clues on the pace of a rebound in Latin America’s largest economyIn politics, traders will watch for progress on an emergency spending bill as it moves through the lower house. Jitters over fiscal spending have contributed to the real becoming the worst-performing currency in emerging markets this yearTurkey’s January current-account deficit due Thursday may narrowThe lira has posted losses for two straight weeksREAD: Economist Who Called 2018 Turkey Crash Sees New Boom, BustSouth Africa will report its fourth-quarter current-account surplus on Thursday, which is forecast to have narrowedThe country is also expected to report manufacturing production data on the same dayOn Friday, Mexico will post January industrial production figures, which will give investors a better look at how activity is recoveringPeruvian policy makers will probably keep a dovish outlook on Thursday by holding borrowing costs at 0.25%, the lowest among major Latin American economies, according to a forecast by Bloomberg EconomicsFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
Cayman Islands-incorporated Meitu said it bought 15,000 ETH and 379.1 BTC in open market transactions on March 5.
New premium subsidies could extend coverage to more than a million Americans.