Latest news with #EurizonSLJCapital
South China Morning Post
4 days ago
- Business
- South China Morning Post
How mainland capital flight is reviving Hong Kong market's mojo
Since US President Donald Trump launched his assault on the global trading system in early April , one theme has dominated the financial market landscape. Contrary to the expectations of many investors, shifts in capital flows emerged as a more important determinant of sentiment than the economic impact of higher tariffs. Nowhere is this more apparent than in Asia, the region most at risk from the onslaught of protectionism because of its greater dependence on trade . The unexpected surge in Asian currencies in response to Trump's tariff blitz drew attention to many Asian economies' huge balance of payments surpluses, part of which were recycled into foreign assets, especially US Treasury bonds. Doubts over the willingness of Asian investors to continue to help fund the large US current account and fiscal deficits amid concerns about the safety of US assets fuelled speculation about 'de-dollarisation'. An alarming report by Eurizon SLJ Capital on May 6 predicted the US dollar – which suffered its worst start to the year since 1973 – faced an 'avalanche risk' as Asian investors began to unwind their huge stockpile of dollar holdings. However, while there is some evidence of a foreign buyers' strike, the US has yet to suffer capital outflows. In China, by contrast, layers of snow have been tumbling down for some time, particularly when it comes to foreign direct investment. Last year, net FDI plunged by US$168 billion, the biggest capital flight since 1990, according to data from the State Administration of Foreign Exchange (Safe). While inbound investment fell to just US$4.5 billion, outbound investment reached US$173 billion as Chinese companies continued to expand abroad The wave of outbound FDI attests to the economic and geopolitical forces pushing Chinese firms to shift part of their operations abroad in a trend reminiscent of Japanese companies' overseas investment spree in the 1980s. Yet while the previous surge in Chinese outbound investment in 2014-2016 was dominated by mergers and acquisitions, the current crop of foreign transactions is focused on greenfield projects – assets that are built as opposed to acquired – in emerging markets, especially Southeast Asia. According to a report by Rhodium Group last September, 'growing trade barriers abroad, pressure to diversify supply chains and the growing competitiveness of Chinese firms in advanced industries' have given rise to a 'new generation of China's overseas investment [with] very different objectives and destinations than in the previous decade'.
South China Morning Post
19-05-2025
- Business
- South China Morning Post
Stronger Asian currencies a mixed blessing for region's property markets
When US President Donald Trump announced now-suspended swingeing 'reciprocal' tariffs on nearly all America's trading partners on April 2, Asian economies – which account for seven of the 10 economies with the largest bilateral trade surpluses with the United States – were singled out for punishment. To some currency analysts, Trump's tariff blitz added to the strain on the region's currencies, which had caused the Bloomberg Asia Dollar Index – a gauge of the performance of leading Asian currencies against the US dollar – to fall to a 19-year low in early January. Yet shortly after Trump unveiled his tariffs, Asian currencies began to appreciate in one of the most unexpected developments in markets since the onslaught of protectionism began. Bloomberg's Asian currency index is up over 3 per cent since April 9 despite numerous climbdowns on trade by Trump. The combination of the drop in the US dollar due to concerns about its safe-haven status , Asian companies' sudden unwinding of some of their unhedged holdings of dollar assets, and speculation that Asian governments will allow their currencies to appreciate to avoid punitive tariffs, has reversed a long period of currency weakness in the region. This could be a foretaste of things to come. In a report on May 6, Eurizon SLJ Capital said US dollar 'hoardings by Asian exporters and institutional investors may be extremely large – possibly in the order of US$2.5 trillion or so – and pose sharp downside risks to the dollar vis-a-vis [several] Asian currencies. This is the 'avalanche risk' we have been warning about since late 2022.'
Forbes
10-05-2025
- Business
- Forbes
Crypto Suddenly Braced For A Huge China Earthquake As $1 Million Bitcoin Price Predicted To Flip Gold
05/10 update below. This post was originally published on May 9 Bitcoin and crypto prices have rocketed higher this week as a perfect storm gathers for risk assets. Front-run Donald Trump, the White House and Wall Street by subscribing now to Forbes' CryptoAsset & Blockchain Advisor where you can "uncover blockchain blockbusters poised for 1,000% plus gains!" The bitcoin price has smashed $100,000 per bitcoin for the first time since February, with traders surprised by U.S. president Donald Trump's crypto czar David Sacks issuing a rare bitcoin price prediction. Now, as traders brace for a $10 trillion Wall Street game-changer, Federal Reserve chair Jerome Powell has been warned a $2.5 trillion 'avalanche' is suddenly heading for the U.S. dollar that could help the bitcoin price rocket toward gold's $20 trillion market capitalization. Sign up now for the free CryptoCodex—A daily five-minute newsletter for traders, investors and the crypto-curious that will get you up to date and keep you ahead of the bitcoin and crypto market bull run Federal Reserve chair Jerome Powell has been warned a $2.5 trillion 'avalanche" is heading toward ... More the U.S. dollar as the bitcoin price soars over $100,000. "We continue to believe the risks of investors being blind-sided by such a non-linear sell-off in the dollar continue to rise," Stephen Jen, chief executive and co-chief investment officer of Eurizon SLJ Capital, and economist Joana Freire warned in a note seen by MarketWatch and pointing to the recent sudden spike in the value of the Taiwan dollar and other Asian currencies that they warn could be a prelude to a dollar sell-off. 'There will be others, we predict,' the pair wrote, adding, 'the overhang of liquid dollar holdings is just too large if the dollar weakens, the Fed cuts interest rates, and China stages a cyclical rebound.' The Fed, which left rates on hold this week, is widely expected to begin cutting interest rates this summer after putting the loosening cycle begun in September on hold, with expectations growing for cuts totaling 75 basis points in 2025. 05/10 update: The bitcoin and crypto market is closely watching the beginning of U.S. China trade talks after U.S. president Donald Trump signaled the U.S. may be open to lowering the massive tariffs that the U.S. slapped on China at the beginning of April, causing the bitcoin price to sharply fall along with wider crypto and stocks markets. "80% tariff on China seems right," Trump posted to his Truth Social account, adding it's 'up to' Treasury secretary Scott Bessent who will be in Geneva, Switzerland for the talks. "After carefully assessing the U.S. messages, China decided to agree to hold discussions," a spokesperson for the Embassy of the People's Republic of China in the U.S. said this week. 'The talks are being held at the request of the U.S. side.' The bitcoin price has surged past $100,000 per bitcoin this week, breaking back above the closely-watched level for the first time since February. 'The market should be on alert that if neither side shows willingness to compromise, it could dampen the current risk-on mood and weigh on the bitcoin market heading into the weekend,' Yuya Hasegawa, crypto market analyst at Tokyo-based Bitbank, said via email. 'Sentiment got an additional lift from the prospect of this weekend's trade talks between the U.S. and China,' David Morrison, senior market analyst at Trade Nation, said in emailed comments. 'While it is understood that these are preliminary discussions, investors are hoping that these negotiations will prove constructive, and lead to a timely resumption in bilateral trade.' However, Morrison added, 'there's a lot of good news already priced in. It's also the case that it takes time to reach trade agreements, and significant damage has already been done to global trade, with relations between the U.S. and China both frosty and uncertain. In other words, it wouldn't take much of a disappointment for investors to start reducing their exposure to equities.' U.S. trading partners could start dumping the massive stores of dollars and dollar-denominated assets they have accumulated since the Fed flooded the market through Covid-era lockdowns, the analysts warned, putting the number of at-risk dollars held by China, Taiwan, Malaysia, Vietnam and other major Asian exporters at $2.5 trillion. Meanwhile, some think a sell-off of the dollar and U.S. assets would flow into bitcoin, which has rebounded back to near its all-time price of almost $110,000 through May. 'The dominant story for bitcoin has changed again,' Standard Chartered Bank's head of crypto research Geoff Kendrick wrote in an emailed note. Sign up now for CryptoCodex—A free, daily newsletter for the crypto-curious The bitcoin price has rocketed back to near its all-time high of close to $110,000 per bitcoin after ... More falling sharply along with other assets since February. 'It was correlation to risk assets. It then became a way to position for strategic asset reallocation out of U.S. assets. It is now all about flows. And flows are coming in many forms,' Kendrick wrote, pointing to bitcoin spot exchange-traded funds (ETFs) inflows, U.S. states that are passing laws allowing their treasuries to hold bitcoin and sovereign wealth fund and pension funds tiptoeing into bitcoin. 'I apologise that my $120,000 second quarter target may be too low,' Kendrick added. Other bitcoin price bulls are even more upbeat, with Miller Value Partners chief investment officer and chairman, Bill Miller IV, telling CNBC the bitcoin price will keep climbing until it eclipses gold's $20 trillion market capitalization. 'Bitcoin's back in the six-figures with a lot of room to go. If you compare its primary functional use case, a check and a balance on the lack of accountability in fiat unit creation, we still have a long way to go,' Miller said, predicting bitcoin's 'functional superiority' will push it to a price of $1 million per bitcoin.
Economic Times
09-05-2025
- Business
- Economic Times
Market veteran warns of impending currency avalanche with U.S. Dollar at risk after a week of global financial shockwaves
A market expert warns of a possible dollar crash. Stephen Jen, Eurizon SLJ Capital CEO, predicts a dollar 'avalanche'. Asian currencies' surge signals a wider dollar sell-off. Geopolitical trends and interest rates may trigger US trading partners to dump dollar assets. China and Taiwan hold $2.5 trillion in at-risk dollar assets. Tired of too many ads? Remove Ads Dollar "Avalanche" Tired of too many ads? Remove Ads Dollar Index Dips Sharply in 2025 FAQs A market veteran is sounding dire warnings about the US dollar's susceptibility after a week of dramatic swings in the world's currency markets, as per a Jen, Eurizon SLJ Capital CEO and co-CIO, has long been issuing warnings about the threat of an abrupt and disorderly weakening of the dollar, which he compared to an "avalanche," as per a Market Watch worst nightmare seems to be coming true. In a recent report, Jen and co-author Joana Freire noted the dramatic surge in the Taiwan dollar and other Asian currencies as one of the potential indicators of a wider sell-off in the dollar, according to Market wrote 'We continue to believe the risks of investors being blind-sided by such a non-linear sell-off in the dollar continue to rise. The sharp sell-off in [the Taiwan dollar] last week is such an example. There will be others, we predict,' quoted Market and Freire also pointed out that the changing geopolitical trends and interest-rate spreads may lead US trading partners to start dumping the huge stockpiles of dollar and dollar-denominated assets they have amassed since the onset of the COVID-19 pandemic, reported Market to their calculations, the amount of at-risk dollars held by China, Taiwan, Malaysia, Vietnam and other major Asian exporters is about $2.5 trillion, a tally that has recently been rising by about $500 billion a year, reported Market worry is aggravated by the fact that the dollar has been overvalued for a while now, and Jen cautions that if the dollar keeps depreciating, foreign US asset holders can liquidate and withdraw their funds, as per the report. From the start of this year, the US Dollar Index, which monitors the value of the dollar relative to a basket of major currencies, has already dropped over 8%, touching a three-year low, reported Market estimated that countries like China and Taiwan hold about $2.5 trillion in potentially at-risk US dollar US Dollar Index is down more than 8% this year and hit a three-year low recently.
Time of India
08-05-2025
- Business
- Time of India
Market veteran warns of impending currency avalanche with U.S. Dollar at risk after a week of global financial shockwaves
A market veteran is sounding dire warnings about the US dollar's susceptibility after a week of dramatic swings in the world's currency markets, as per a report. Dollar "Avalanche" Stephen Jen, Eurizon SLJ Capital CEO and co-CIO, has long been issuing warnings about the threat of an abrupt and disorderly weakening of the dollar, which he compared to an "avalanche," as per a Market Watch report. #Operation Sindoor Live Updates| From Sindoor to showdown? Track Indo-Pak conflict as it unfolds India hits Lahore's Air Defence Radars in proportionate response Pakistan tried to hit military targets in these 15 Indian cities, New Delhi thwarts strikes Jen's worst nightmare seems to be coming true. In a recent report, Jen and co-author Joana Freire noted the dramatic surge in the Taiwan dollar and other Asian currencies as one of the potential indicators of a wider sell-off in the dollar, according to Market Watch. Continue to video 5 5 Next Stay Playback speed 1x Normal Back 0.25x 0.5x 1x Normal 1.5x 2x 5 5 / Skip Ads by by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Belly Fat Removal Without Surgery in Algeria: The Price Might Surprise You Belly Fat Removal | Search Ads Get Info They wrote 'We continue to believe the risks of investors being blind-sided by such a non-linear sell-off in the dollar continue to rise. The sharp sell-off in [the Taiwan dollar] last week is such an example. There will be others, we predict,' quoted Market Watch. Jen and Freire also pointed out that the changing geopolitical trends and interest-rate spreads may lead US trading partners to start dumping the huge stockpiles of dollar and dollar-denominated assets they have amassed since the onset of the COVID-19 pandemic, reported Market Watch. Live Events According to their calculations, the amount of at-risk dollars held by China, Taiwan, Malaysia, Vietnam and other major Asian exporters is about $2.5 trillion, a tally that has recently been rising by about $500 billion a year, reported Market Watch. Dollar Index Dips Sharply in 2025 The worry is aggravated by the fact that the dollar has been overvalued for a while now, and Jen cautions that if the dollar keeps depreciating, foreign US asset holders can liquidate and withdraw their funds, as per the report. From the start of this year, the US Dollar Index, which monitors the value of the dollar relative to a basket of major currencies, has already dropped over 8%, touching a three-year low, reported Market Watch. FAQs How much dollar risk is out there globally? Experts estimated that countries like China and Taiwan hold about $2.5 trillion in potentially at-risk US dollar assets. How is the dollar performing right now? The US Dollar Index is down more than 8% this year and hit a three-year low recently.
