Hope all is well! 

Key News Overnight

• Asian equity markets celebrated the Fed’s dovish guidance while HK & mainland equity markets benefited from improved trade sentiment, improved interbank liquidity and six more STAR market (Science & Technology Board) IPO approvals. Ping An’s mainland buyback was also cited as a sentiment improver. While the US dollar index (DXY) weakened, CNY surged 0.7% from 6.90 to 6.85 in a very strong move. CNY has a lower volatility than the euro, yen or pound though China’s 10 Year Yield of 3.24% is increasingly a positive outlier globally. Candidly I can’t recall a day this strong.

The Hang Seng gained +1.23%/+348 index points on strong breadth of 44 advancers and 4 decliners though volume actually declined ~7% day over day and slightly above the 1 year average. Index heavyweights led the way higher with AIA +2.56%/75.8 index points, Ping An +3.68%/+58.8 index points and Tencent +1.96%/+55.9 index points on a Bloomberg report that its Peacekeeper Elite will make $1B. Geely Auto (175) gained +4.87% after the WSJ is reporting Harley Davidson will build a motorcycle in China for the local and Asian markets. The HK stocks within the MSCI China All Shares gained +1.69% led higher by materials despite rare earth stocks falling on improved US China dialogue +2.08%, financials +2.03% led by brokers on the STAR board news and real estate +1.97% as the HK Monetary Authority will have to follow the Fed in interest rate cuts due to its US $ peg. All sectors ended in the green. Southbound Connect was surprisingly mixed on light volume with volume leader Ping An seeing 2 to 1 buying. 

The Shanghai & Shenzhen gained +2.38% and +1.95% on very strong volume nearly 20% higher day over day and 1/3 higher than 1 day average. Breadth was equally impressive with 3,026 advancers and 587 decliners. Mega caps had a strong day outperforming small and mid caps by 125bps driven an absolutely monster day in financials. The mainland stocks within the MSCI China All Shares gained an impressive +3.57% led by financials +4.73%, staples led by alcohol companies +4.23%, discretionary +3.3%, trade sensitive tech +3.07% as all sectors ended in the green as even laggard utilities gained +2.07%. Northbound Connect volumes were strong as foreign buyers were out in force buying $812mm of mainland stocks. Mainland investors are playing short term themes though foreign investors are playing New China/domestic consumption stocks as evidenced by the very strong buying on the Shenzhen Connect last night. Shanghai Connect was strong though trading in the volume leaders was mixed. 

JD.com concluded its 6-18 sales festival though I’ve not seen any press releases from the company. A mainland media article noted the company had sold $29 billion worth of goods which is up 27% year over year.

• CNY 6.85 versus 6.90 yesterday
• Yield on 1 Day Chinese Gov’t Bond 1.44% versus 1.49%
• Yield on 10 Year Chinese Gov’t Bond 3.2499% versus 3.2499%
• Yield on 10 Year China Development Bank Bond 3.73% versus 3.74%
• Commodities were higher again on the Shanghai & Dalian Exchanges with Dr. Copper +0.02%