China Market Falls 8.5%... Ouch... | Commodities Under Pressure... | Emerging Markets - Alert |

Niv Dagan

Peak Asset Management

Good Morning, Houston… we have a problem… China’s share market fell by 8.5% in yesterday’s trade, to mark the biggest one-day fall since 2007… Commodities (Oil, Gold, Copper, Iron Ore, Silver) are in bear market territories and combined with a rising USD, bond yields are about to head much higher, putting further pressure on base metals… This is what we call “a perfect storm” for emerging markets…… South Africa, Australia, Brazil, Mexico, Canada, Russia etc. all rely on commodities to drive economic growth… If you add rising bond yields to the equation, we are about to see their respective currencies continue to “free-fall”, stemming a large amount of outflows from these countries… This has far wider implications than what we have previously seen… Can we make money from this? Absolutely….. We can short emerging market currencies (i.e. MXN vs. USD) or AUD vs. USD…. We can short their respective indices… we can buy the VIX, which has dropped back to pre-Greek levels… interesting times ahead… The SPI is pointing to a 44 point fall this morning


Niv Dagan
Niv Dagan
Executive Director
Peak Asset Management

Prior to founding PEAK Asset Management, Niv headed up HC Securities, spent three years growing Halifax Investments capital markets division and also worked on the wholesale desk at Macquarie Bank, servicing a wide range of institutional,...

Expertise

No areas of expertise

I would like to

Only to be used for sending genuine email enquiries to the Contributor. Livewire Markets Pty Ltd reserves its right to take any legal or other appropriate action in relation to misuse of this service.

Personal Information Collection Statement
Your personal information will be passed to the Contributor and/or its authorised service provider to assist the Contributor to contact you about your investment enquiry. They are required not to use your information for any other purpose. Our privacy policy explains how we store personal information and how you may access, correct or complain about the handling of personal information.

Comments

Sign In or Join Free to comment