Chillin' out till it needs to be funded
JP Morgan’s bid for a local mutual fund notwithstanding, nothing substantial has happened from the House of JP Morgan and Goldman Sachs after setting up $5 bln in funds with local government as Private Equity and as mutual funds .
The JP Morgan 20% in Funds venture will also likely be a low key venture as BOCOM and HSBC , Stanchart and Citibank take out a big slice of the growing retail banking, payments and trade finance franchise with Chines e Big 4 and the Top 10 otherwise growing large footprints in credit and benefiting from the newly opened business in Renminbi including the 15% share of the Currency in Global China trade and finance.
Meanwhile many took the housing data to be negative while it was the continuation of the earlier mildly positive trend consolidating with large Y/Y growth maintained in February 2012
The HSBC Flash PMI finally proved its differences with the state sponsored PMI in the meantime, the preponderance of Private Enterprise diverging from the State’s increasingly suspect number of 51 for the month of March 2012, final data coming at month end. The HSBC index, even at a low 48.1 is however, not in the contraction mode according to its own economists. However the HSBC no. is a large decline from February’s 49.6 while the State’s survey is actually growing steadily since November, now hitting 51 from a 50.4 last month. China is yet encouraging investment in gold coins and jewelry while the currency appreciation has tapered off but the business in Yuan is expanding.
The Japanese trade surplus after a more than a 1 Tln deficit in the previous month capped the Yen to a boottom near 84 even as the dollar index conrtinued to weaken and the Euro moved up to $1.32 levels.
China has reduced its holdings in US treasuries to 54% from nearly 70 % two years ago, while handing over large $20-$50 bln chunks to PE managers for larger equity investments.
US Treasuries also finally ticked down from a peak of 2.35% on the 10-Y bond, dipping down to consider if funds should actually leave the safe haven for equities or the old safe haven of the Yen, while Equities are not ready to give up the gains of the first quarter, BofA hitting $10 earlier this week.