Ah, sorry, I didn't see the connection... I guess it makes sense. If you could, would you not rather bet on the RMB peg going (I mean sooner, rather than what's being constantly promised)?
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Global Macro Trading Journal
- Thread starter Daal
- Start date
The holy grail might be the HKD bet plus a SHORT on EWH(Hong Kong stocks). There is a financial/real estate HK ETF(TAO) but its quite illiquid and the short rate is -3.5%
The EWH is way more liquid, short rate is less than -1%. Plus over 50% of the holdings are real estate/financial anyway
So this could be powerful way to bet on reval while being protected against a China collapse
The EWH is way more liquid, short rate is less than -1%. Plus over 50% of the holdings are real estate/financial anyway
So this could be powerful way to bet on reval while being protected against a China collapse
Quote from Martinghoul:
Ah, sorry, I didn't see the connection... I guess it makes sense. If you could, would you not rather bet on the RMB peg going (I mean sooner, rather than what's being constantly promised)?
Just thinking out loud, but what if the RMB goes down in value if China has a hard landing? That would take a lot of pressure off HKD needing to revalue.
I dunno much about this, as I am by no means involved in anything Asian. However, there's all sorts of thoughts swirling arnd in my head now. One thing for sure... Options often offer the best way to bet on these sorts of binary de-pegging outcomes, since you should be able to pick up some outstrikes ridiculously cheaply. Again, not sure if this is the case with HKD, 'cause I haven't looked at it. But I will do some thinking.Quote from ralph00:
Just thinking out loud, but what if the RMB goes down in value if China has a hard landing? That would take a lot of pressure off HKD needing to revalue.
Quote from Martinghoul:
Ah, sorry, I didn't see the connection... I guess it makes sense. If you could, would you not rather bet on the RMB peg going (I mean sooner, rather than what's being constantly promised)?
I suppose one difference is that HK is at the top of the economist list of countries 'most likely to overheat' along with Argentina and Brazil. And this is just speculation on my part but I think the facts support but it seems that HK has less control of the rates banks lend at(and lending in general) whereas China, because they own the banks, can dictate more as a result they can try to manipulate rates and credit more and have less incentive to revalue