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Evergrande

Oil’s Tug-of-War: Iran Tensions vs. Evergrande Oil’s Tug-of-War: Iran Tensions vs. Evergrande On Wednesday, WTI crude futures dropped below $77 per barrel, undoing a 1.4% increase from the prior session, all while the U.S. readies itself to address a lethal attack on its troops in the Middle East. Perhaps traders are concerned more about the liquidation of China Evergrande, raising worries about the overall Chinese economy. There is fear that this uncertainty in China could lead to a decrease in demand for crude oil. However, there is a question of whether traders might be underestimating the potential for U.S. responses to the lethal attacks to escalate tensions or lead to a conflict with Iran. Despite President Biden expressing a desire to avoid a wider war in the Middle East, there are concerns about the unpredictable outcomes of such military actions. The Guardian predicts dire consequences if there is direct American military retaliation against Iran. This could prolong the Gaza conflict, trigger a Hezbollah attack on Israel, escalate conflicts in Iraq and Syria, and destabilize friendly regimes in Egypt, Jordan, and the Gulf. Additionally, such actions could inadvertently assist China in pursuing its anti-democratic geopolitical ambitions and provide justification for Russia's aggression in Ukraine.
BLACKBULL:WTI
by BlackBull_Markets
NZD/USD climbs ahead of retail salesThe New Zealand dollar has posted strong gains on Tuesday. In the European session, NZD/USD is trading at 0.5959, up 0.55%. On the data calendar, New Zealand retail sales are expected to decline by 2.6% q/q in the second quarter, compared to -1.4% in Q1. The New Zealand dollar has gone on a dreadful slide since mid-July, falling as much as 500 basis points during that spell. The current downswing has been driven by weak global demand and jitters over China's economy, which is showing alarming signs of deterioration. Chinese releases have been pointing downward recently. Exports and imports have fallen, manufacturing activity is weak and the world's second-largest economy is experiencing deflation. Last week, Evergrande, a huge Chinese property developer, filed for bankruptcy in the United States, raising fears of contagion to other parts of the economy. It wasn't long ago that the Chinese 'miracle' was being touted as an economic powerhouse on the global stage, but now the world's second-largest economy is in deep trouble and is dragging down global growth. An interesting silver lining is that deflation in China could help lower inflation worldwide, which would be good news for the Fed, ECB and other central banks that are battling to push inflation lower. The People's Bank of China (PBOC) has responded in recent days to the economic slowdown with some cuts to lending rates, but surprisingly, has not trimmed the five-year loan prime rate, which has a major impact on mortgages. The PBOC's lukewarm move to the economic crisis could mean China's economy will continue to sputter, and that is bad news for the New Zealand dollar, as China is by far New Zealand's largest trading partner. If Chinese releases continue to head lower, we can expect the New Zealand dollar to continue losing ground. NZD/USD has pushed above resistance at 0.5941 and is putting pressure on resistance at 0.5978 There is support at 0.5885 and close by at 0.5848
by OANDA
Analyzing the Recent Bitcoin Dump - 2 Potential ScenariosIntroduction : Bitcoin experienced a sudden 9% drop from $27,712 to $25,166 in just 9 minutes following the news of China Evergrande's filing for US bankruptcy. The bankruptcy news came out around 11 pm UK time, and it seems to have had a cascading effect on liquidations, leading to this significant price movement. Two possible scenarios can be derived from the current market situation: Scenario 1 : Bitcoin has reached a new 2-month low of $25,166 and could rebound to new highs, marking the bottom. Scenario 2 (More Likely): Bitcoin may follow the SP500 and Nasdaq in a possible near market crash, mirroring recent market anxieties. Fibonacci Retracement Analysis (15min chart) : Utilizing a modified Fibonacci retracement tool, we can further analyze the Bitcoin price movement. By mapping from a high (1) of $28,706 to a low (0) of $25,166, we find the following significant levels: Stop Loss (1) : $28,706 Golden Zone (0.618 & 0.5): $27,298 & $26,877 Potential Entry Point (0.382): $26,463 – Currently being rejected from the golden zone. Take Profit 1 (0): $25,166 – Sell 40% of the position Take Profit 2 (-0.382): $23,931 – Sell 30% of the position Take Profit 3 (-0.618): $23,199 – Sell 20% of the position Take Profit 4 (-1.618): $20,338 – Unlikely , but sell the remaining 10% of the position in case Conclusion : As we navigate the turbulent market landscape, keeping an eye on key Fibonacci levels (and on the news...), and recognizing the potential connection between Bitcoin and broader market indices may provide invaluable insights. While the immediate future remains uncertain, careful planning around these critical points may help traders position themselves for the coming shifts.
Short
by Robin_Nakamoto
Chinese Real Estate -8% TodayJust FYI, an equally price-weighted basket of large Chinese real estate companies is down 8% today. Rumor is going around lots of companies in this sector are not paying interest payments and are on the verge of default. Maybe it could spill over into global markets? Dare I say it could be an outbreak in the market flu? These companies are much larger than Enron. Evergrande (HKEX:3333) by itself has 120,000 employees, about 6 times as many as Enron had. Maybe something to think about. Here is the symbol if you want to view it yourself: '1918'/2.912+'0960'/2.862+'2202'/2.623+'2777'/1.112+'3333'/1.527+'2007' I hope this was somehow useful. Good luck and don't forget to hedge your bets!
HKEX:1918
by fringe_chartist
8
Is the Evergrande crisis over?The looming collapse of China Evergrande Group (HKG:3333), the world’s most indebted property developer, has roiled financial markets for months, threatening a contagion with far-reaching implications on China and the wider economy. In the early months since Evergrande’s financial crisis came to light, Beijing stayed mum on the issue, although the People’s Bank of China pumped billions of yuan in liquidity in what was seen as an attempt to quell liquidity concerns. Over this time, Evergrande’s stock price slipped 95%, from ~25HKD to ~1.5HKD, where it has stagnated for all of 2022. Evergrande’s massive debt pileup Evergrande, once China’s second-largest real estate developer, is drowning in more than $300 billion in debts to suppliers, contractors, creditors and investors. The company’s crisis partly stemmed from the introduction of Beijing’s "three red lines" rule in 2020 that made it harder for developers to seek bank financing to fund their projects. Another Lehman Brothers moment The large exposure of Chinese banks like Minsheng Bank, Ping An Bank and Everbright Bank to Evergrande prompted many financial watchers to predict that Evergrande's debt crisis could extend beyond China’s property and financial markets, warning that it could spill over to the global markets similar to the Lehman Brothers collapse that resulted in the 2008 global financial crisis. These fears intensified as Evergrande missed payments on a number of onshore bonds. The world’s three major credit rating agencies have already declared the developer to be in default after missing on its bond interest payments late last year. However, some analysts have played down concerns of Evergrande being the next “Lehman moment,” as they expect Beijing’s policymakers to prevent the crisis from being a systemic risk. Beijing steps in to limit fallout To minimize the potential impact of Evergrande’s looming collapse, Beijing has stepped up its efforts, but without a state-led bailout in sight. Back in October, the Chinese central bank said the risk of Evergrande’s liabilities spilling over to the country’s financial sector is "controllable,” while confirming reports that relevant government agencies and local governments have been carrying out risk disposal and resolution work to mitigate a potential contagion. In recent weeks, a number of news outlets reported that some banks in China have lowered mortgage rates, offered subsidies and allowed developers to access their funds on escrow in an attempt to revive the housing market. Beijing also started urging state-owned developers to acquire some projects of troubled builders to help ease the sector’s liquidity crunch. Fitch Ratings recently said Chinese developers are poised to see more small-scale mergers and acquisitions and the impact on buyers’ leverage are predicted to be small "as they select projects with promising returns." Light at the end of the tunnel It may take months or years for the property sector to recover as developers continue to struggle with a cash crunch that prevents them from meeting their debt obligations. However, with Beijing’s subtle approach in reviving the property market, Evergrande’s recovery may be drawing near. In February, new home prices in 100 cities in China rose for the first time in two months, further recovering from the slump in November when prices contracted for the first time since 2015. Policy reforms could encourage home-buying this year as the government included the healthy development of the real estate sector in its government work report unveiled by Premier Li Keqiang over the weekend. Li said authorities will seek to promote the commercial housing market and stabilize house prices this year. Foreign investors that purchase bonds and other securities from Chinese builders should closely monitor developments surrounding Beijing’s policies for the sector.
HKEX:3333
by BlackBull_Markets
Will the Fed's Interest Rate Hikes Be Good or Bad for Crypto?It's probably going to be a tough market in the short term, but the interest rate hikes of 22' is exactly what the economy needs right now. Reducing access to cheap loans should curb the frenzied markets, at least somewhat. (Though given how low the rates are projected to be, probably not enough.) What does this mean for crypto? Well, that's the big question everyone is asking now. They said that Evergrande and cryptocurrency would go down together, but that didn't turn out to be the case. Will the same happen to USD? In a way, 22' is going to be a big test for how resilient the USD really is. Politics has been warping the numbers lately but inflation is the lie detector that will reveal the truth about the US economy. American Exceptionalism? Or will it follow the same pattern China did? Time will tell. (If you're a crypto supporter like me, you're hoping for the latter, of course.)
Long
by RyanTanaka
Australian dollar trading sidewaysTis the week of Christmas, which means eggnog, crackling fireplaces and thin liquidity in the markets. With Australian markets closed on Monday, the Aussie has shown little movement today and this should continue in the North American session. There are no Australian events on this week's calendar, so any movement of AUD/USD will come from events abroad. The US has mostly tier-2 releases this week, so events in China may have a magnified impact on the Aussie. There were some positive developments on the weekend in China. The PBOC said it would provide more support for the economy. As well, there were media reports that Evergrande has resumed most its home construction projects. The mammoth company owes more than USD 300 billion in liabilities, and any news concerning Evergrande could have an impact on the Australian dollar, as China is Australia's largest trading partner. With a very light calendar, market participants will have some time to focus on the RBA, which has been in the headlines frequently in recent weeks and published the minutes of the December meeting just last week. The minutes were cautiously optimistic. with the bank saying that it did not expect the Omicron variant to derail the economic recovery. Still, the bank noted that Omicron "posed additional uncertainty for the near-term outlook." Given the disparity between RBA guidance and the markets' expectations for a rate hike, this language is a signal that the bank has no intention of raising interest rates anytime soon. The month of December is all about volatility, and the Australian dollar has already delivered on that front, with significant movement. Liquidity will be thin as we head towards the New Year, which could mean further volatility, especially if there are further developments surrounding Omicron, good or bad.   0.7288 has held in resistance since mid-November. The next resistance line is at 0.7354 There is support at 0.7119 and 0.7016
by OANDA
China Evergrande Defaults! Now What?China Evergrande, the second-largest real estate developer in China, has been narrowly dodging default for months. The Company has more than US $300 billion in debt that, as it warned the market back in September, it believed would be difficult for it to service. (As an aside, it is believed that China Evergrande could have an additional US $150 billion in debt, off its official financial books). Put simply, the cash flow of the Company, severely dampened by the cooling Chinese housing market, is not enough for it to service interest payments to those from which it borrowed funds, typically in the form of interest-bearing corporate bonds. One such unlucky purchaser of China Evergrande corporate bonds, among others, are off-shore investors. Off-shore bondholders will likely be the least prioritised of the Company’s investors when receiving interest payments or reparations. China Evergrande defaults! Perhaps fortuitously, it was the failure by China Evergrande to make interest payments to this very group of investors that prompted Fitch Ratings to upgrade the Company’s status to “restricted default” on December 9. Interestingly, China Evergrande is the twelfth Chinese real estate firm to default on bonds in 2021, and by far the largest to do so. Now what? Other rating agencies, such as Moody’s and S&P Global, have not been so quick to upgrade their status of China Evergrande. However, S&P Global has noted that China Evergrande’s default is “inevitable”. China Evergrande themselves seem to be ignoring public comment on its failure to meet its obligation, nor has it ceased operations or begun any formal paperwork to address its potential bankruptcy. China Evergrande is currently under restructuring while attempting to continue operations as usual. The restructuring includes renegotiating its liabilities and offloading non-construction arms of the Company at bargain prices such as its property management business, as well as stakes in a major Chinese bank and (strangely enough) a streaming services. Pressure is being applied to the Company’s leaders to speed up its restructuring since the change in its Fitch rating. According to Bloomberg, the China Evergrande restructure is being heavily monitored, if not outright controlled by Chinese Authorities in Beijing and the Company’s home province of Guangdong. Right now, the official line from the Central Bank of China is that the China Evergrande crisis is being handled as per the “principles of marketization and rule of law,”. If more rating agencies follow Fitch Rating in the coming weeks, China Evergrande could slip into something a little more serious than restricted default and the above quote may become a little truer, with Chinese authorities being hamstrung in their ability to interfere with a meltdown.
HKEX:3333
by BlackBull_Markets
Evergrande's SelfdestructionEvergrande shares, symbol 3333, have been getting demolished as of late. On December 6th it broke past its all time lows of 1.88 HKD. This puts Evergrand's stock over 94% down from it's ATH of 32.39 HKD now at 1.77 HKD. The stock is no longer in free fall however, that may not last for long. On December 9th the real estate developer had defaulted on its debt for the first time. Despite the striking resemblance to the fall of Lehman Brothers, Evergrande has made strong efforts to distance itself from being perceived as fundamentally the same thing. Narratives around possible contagion to global markets have fuelled uncertainties and a possible run to risk off. Crypto could suffer due to offshore creditors to Evergrande such as Black Rock who also have exposure to BTC and ETH possibly selling to rebalance or cover losses. Please check out my previous analysis on BTC/USD where I predicted a retrace to $50k with support @ $47k. If you like my content, feedback, likes and coins are encouraged and appreciated! Thank you.
HKEX:3333Short
by Kumo9