Tag Archives: China

Chinese young people born after 1990 are happy to spend money on things their parents and older siblings would likely have considered frivolous, but they’re also much more discerning consumers than previous generations. How will Young China’s attitude toward consumption affect their buying behavior? Watch the video to hear Vincent Chan, Head of China Research at Credit Suisse, talk about the preferences of China’s all-important next generation of consumers at Credit Suisse’s 6th Annual China...

A major turnaround in market sentiment appears unlikely in the short term, given continued concerns over growth and policy, as well as a likely poor corporate results season. Chinese equity markets experienced a substantial sell-off in early January, with the CSI 300 losing 7% on both 4 and 7 January. This sent jitters across global financial markets. The latest bout of market instability in China does not appear to have been related to any change in the country’s economic fundamentals....

Is it August 2015 again? In the first week of January, a spectacular Chinese stock market crash once again prompted officials to provide extraordinary stimulus measures and devalue the yuan. Just as before, gyrations in China pushed global markets deep into risk-off mode, with selloffs in Asian, European, and U.S. equities, as well as crude oil futures. The resolution is likely to be the same as it was last August, too, according to Kasper Bartholdy, Head of Emerging Market Fixed Income...

On November 30, the International Monetary Fund invited the renminbi to join the pound, euro, U.S. dollar, and yen in an exclusive club of international reserve currencies starting in October 2016. China has been working to make its currency a credible global player for at least two decades, and the nod from the IMF is a significant symbolic victory. Still, don’t expect central banks to scoop up mass quantities of renminbi just yet.   Central banks currently hold only about one percent...

(Here is a draft of a monthly column I write for a Chinese paper) It is official.  The Chinese yuan will be in the SDR.  At a 10.4% share, it is a bit more than I expected, but less than the 14%-16% share that the IMF staff has intimated a few months ago.  This is a significant event, even if there is no short-term market opportunity.   The yuan’s exchange rate against the dollar has steadily declined over the month of November contrary to conspiracy theories that warned Chinese...

The same, only more of it. That’s the kind of year 2016 promises to be, according to Credit Suisse’s Global Markets annual outlook. Markets will obsess over if, when, and how much the Federal Reserve will raise interest rates. (Four times starting in December for a total of 1 percentage point, says Credit Suisse.) Credit Suisse’s Global Markets team believes global economic growth will pick up, driven by improvement in the U.S. and Europe, central bank policy will diverge further, and...

SWAP spreads recently took a nosedive and are once again trading at negative levels, even for shorter maturities. As can be seen from the chart below, treasury yields, here represented by the 10 year maturity, rose during QE policies programs contradicting the very raison d’être spouted by the central bankers. Interestingly enough we also see the same pattern in SWAP spreads. As QE programs were enacted SWAP spreads started to move upwards, just to rollover as the central bank program...

How wealthy has China become? At last count, the country accounted for a full 8 percent of all global ultra-high net worth investors—those worth more than $50 million. What will those UHNWIs do with that newfound wealth? That’s an important question, because household wealth is a key driver of consumers’ consumption and investment decisions as well as entrepreneurial activity, and that holds true whether one is Chinese, American, or otherwise.   China and the United States led the...

Every now and then, the developed and emerging economies of the world find themselves in sync, growing or contracting together. This is not one of those times. In late 2015, a trend that started in 2014 accelerated, as the balance of global growth is tilting toward developed markets and away from emerging ones. Whereas Credit Suisse economists expect growth in developed economies to accelerate this year—up 1.9 percent versus 1.7 percent in 2014—they forecast slower growth in emerging ones, up...

A selloff as violent as the one global equities markets experienced this past Monday can have effects that mirror a real-life earthquake. Once the earth stops moving, shell-shocked investors have to figure out what caused all the shaking and whether aftershocks are coming. They also have to determine whether anything valuable is hiding in the debris.   To the first point, it’s quite clear that trouble in China was the catalyst for the rout. It all started on Friday, August 21, when...