Market Depth

Nvidia surprised the street with another major beat to guidance estimates for its Q2 earnings release - arguably the most widely watched corporate earnings report globally in 2023, with the stock +9% higher in after-hours trading. However, in the following Asia trading session - which is the world's first region to start the full trading day, and thereby the first to react to the A.I. giant's stro...

China has had a very rough 2023, in markets and in the real economy. But, last week was a particularly brutal week for China’s markets, as the Hang Seng Index closed the week in bear market territory, and the yuan edged ever closer to its treacherous 15-year lows - all of which had spilled over to broader global markets. Weston Nakamura gives a comprehensive overview of what happened in China thro...

As followers of Market Depth Podcast know- this year's NASDAQ upside rally was largely driven by Japan and the Nikkei225. Now, Weston Nakamura explains how the current market sell-off is being driven by China, and the plunging yuan. Weston also discusses his views on the Japanese yen, and how he is approaching the FX market intervention risk, as the yen weakens to previous unilateral intervention...

Ahead of the US July CPI data and the 30-year Treasury auction, Weston Nakamura follows up from the previous episode of Market Depth with an update on bond market activity from Japanese investors, who have been driving the week's drop in global sovereign bond yields via the JGB and US Treasury markets. Using futures markets, Weston shows the renewed bullish sentiment as exhibited by a surprisingly...

With still no further clarity on Bank of Japan’s new policy framework of Yield Curve Control, and currency and cash bond markets out of sync, Weston Nakamura examines market price action and activity on US and Japan rates through the lens of futures markets, in order to determine if cross asset market behavior is normalizing. Weston also notes the schedule for this week, in which there will be 30-...

Developed markets globally saw a dramatic rise in sovereign bond yields that spanned this whole week - notably at the long end of US Treasuries. Some attribute the move to Fitch Ratings downgrade of US debt, while others point to the government's announcement to boost its bond issuance in the coming months. Following up from the previous episode of Market Depth, Weston Nakamura shows how this week...

At the July 2023 Monetary Policy Meeting, the Bank of Japan took markets by surprise (after "pre-announcing" its policy 10 hours prior during US trading hours and moving global currency, equity and bond markets) by making a significant change to its Yield Curve Control policy framework, in which it lifts the upper trading band on 10-year JGB yields from 0.50% to 1%. The central bank also made a ma...

The final week of July ends with the three major central banks’ policy decisions - the Fed, the ECB, and the Bank of Japan - each with their own set of issues and tools respectively, and all of which are highly interconnected with one another. However, the economic backdrop is completely unique this time - as Japan now has a higher inflation rate than the US, while still in easing mode. Would the...

With the strongest daily yuan fixing since November 2022, along with state banks sustaining dollar-selling, and the adjustment of a cross border financing rule to further discourage yuan sell pressure all in combination, the People’s Bank of China was able to forcefully rally the yuan significantly higher. In addition, China's USD-denominated junk bond market sees its worst three-day plunge so far...

With China's Q2 GDP and retail sales figures missing consensus estimates for yet another round of data disappointment out of China, and the PBOC injecting a mere 3 billion yuan of liquidity to their 1-year MLF operation. Weston Nakamura looks at currency and commodity markets as weakness across China's economic landscape continues to be left unattended by policymakers' lack of stimulus measures. W...

US inflation figures came in considerably softer than expectations, and global currencies, bonds, equities and commodities rose at the expense of the U.S. dollar. But what happens when US CPI is now below Japan CPI? What does that mean for markets (namely the yen), and the Bank of Japan’s upcoming policy meeting (with direct implications on global bond markets)? Weston Nakamura discusses the US vs...

In today's episode, Weston Nakamura explains the recent price action of the world's worst performing currencies in 2023: the Japanese yen's sudden surge as options on futures expire and crowded positions close, and the Chinese yuan in crisis mode as the authorities continue to urgently exercise multiple yuan-supportive measures. Weston suggests that should the yen short covering gain momentum, glo...

In order to get a truly expert assessment on the liquidity picture out of China, Michael Howell from Crossborder Capital joins Weston Nakamura, as they explore Weston’s thesis from the previous episode of Market Depth - China’s immediate term priority is to stop the yuan’s precipitous fall. This has been made evident by the PBOC’s daily yuan fixings stronger, as well as their net liquidity drainin...

Over the weekend, the top brass at China’s central bank Yi Gang (PBOC Governor) and Guo Shuqing (PBOC Communist Party Chief) were suddenly removed from their posts after having been reappointed by President Xi Jinping less than four months ago. Meanwhile, PBOC Deputy Governor Pan Gongsheng has been elevated to the role of Party Secretary at PBOC, and is also expected to be named Governor of the PB...

Bank of Japan Governor Ueda surprisingly stole the show when making his first international English appearance since taking office at the ECB’s annual gathering of central bankers in Sintra, Portugal this week, during a live panel with fellow peer central bankers including Fed Chair Powell, ECB President Lagarde and Bank of England Governor Bailey. Clips from the event of the new face of the Bank...

After being sidelined by coronavirus, Weston Nakamura returns to Market Depth with charts and graphics to discuss the Japanese yen edging ever closer to the critical 145 level against USD - currently the single most important market and price level anywhere, as markets are on Japan officials’ intervention alert. Weston shows how Japan’s October 2022 unilateral foreign exchange direct market interv...

Following last week's series of rate cuts that were met with tepid market response, China delivers another -10 basis point rate cut to its 1-year and 5-year Loan Prime Rates before market open today in-line with its recent measures - only this time, markets pulled sharply back. Is this the start of a new market paradigm? Weston Nakamura scrutinizes market price action out of China today in search...

Off the heels of the June 2023 FOMC's "hawkish pause," PBOC's "catch-up cuts," ECB's "hawkish hike," and BOJ's "dovish autopilot unchanged" policies, Weston Nakamura takes a look back at a historic week of globally synchronized fragmentation among major central banks. In particular, Weston looks into the peculiar relationship forming between the European Central Bank, and the Bank of Japan, in whi...

After months of wide-scale economic deterioration in China, the People's Bank of China and the central government are finally taking action with three waves of stimulus measures today. The PBOC first makes a surprise cut to the 7-day reverse repo rate before market open on Tuesday, followed by a Bloomberg report of a broad based stimulus package at the end of the trading day, and finally a late-ev...

The US equity market's performance, particularly in outperforming tech stocks, is not what it seems. Weston Nakamura lays out his analysis and observations on how the Nasdaq 100 Index is being driven by Japan's Nikkei 225 index. Additionally, Weston explains how the ongoing issue of weak market breadth and narrow participation is also a byproduct of the immense foreign equity inflows into Japanese...

The sustained and incredibly resilient Japan equity rally crashed today - despite broader indices left relatively unscathed (although S&P E-Mini futures also followed Japan indices sharply downward during Asia hours). Why did this occur, and what does it mean for the world's favorite and best performing market, as well as broader markets globally? Weston Nakamura breaks down the three sell-catalys...

The Reserve Bank of Australia shocks markets again, hiking rates for a second consecutive time after having paused once before, and thereby setting precedence for the June FOMC next week, when the Fed is expected to “skip” a rate hike. Weston Nakamura explains the significance of the RBA’s policy behavior to other major central banks. Weston also shows how and why AUD matters to risk assets, such...

Following up from Friday's episode of Market Depth, Weston Nakamura reviews the global equity markets' initial reactions to China's after-hours headline for new stimulus targeted at the Chinese real estate, property and development sectors on Friday evening in Asia. The market impact was significant across the world, with stocks like Caterpillar pushing the Dow Jones Industrial Average higher by 2...

Chinese shares in the Hang Seng Index staged a massive recovery rally to end the week in which it temporarily fell into official bear market territory, and uplifted the entire region for a broad based equity market surge during the Asia trading session. Then, after Asia markets close, Bloomberg reports that China will unveil a new stimulus package to support the systematically critical and increas...

A lousy Manufacturing PMI reading out of China pulled the Hang Seng index officially into bear market territory, sent the yuan crashing through 7.10, and seemed to have set off a broader, risk-off market move that reverberated across asset classes globally.  But, did yet another piece of weak economic data from China really spook global markets - particularly the previously China-resilient DM equi...