The week ahead - China activity anticipated to slow, US government shutdown nears end?

🆙On Sunday, China released October inflation data that unexpectedly increased 0.2% from a year earlier, after the 0.3% decline the month before. Economists had expected a 0.1% drop

🏝The October inflation pick up was attributed to the increased travel, food and transport demand around the Golden Week and deemed fleeting

🔻China has faced deflationary pressures in recent months, recording declines in prices for August and September. The country’s GDP deflator — the broadest measure of prices — has been in decline for over two years, the longest streak since the quarterly data began in 1993 (Bloomberg)

🐌Persistent deflation encourages consumers to delay purchases, spending and leads to lower investment. The Chinese government's "anti-involution" campaign to stamp out price wars is part of their effort to breaking this cycle due to deflation

5⃣On Friday, a series of activity data for October will be further released in China.

🏭Following the recent slump in PMI, industrial production growth is expected to slow from 6.5% year-on-year (YoY) in September to 5.5% YoY in October.

💰Meanwhile, the downturn in Fixed Asset Investment (FAI) is likely to persist, with an anticipated 1% YoY decline in Jan to Oct.

💳On the consumption side, retail sales growth is projected to slow to 2.7% YoY in October, marking the slowest pace since September last year. This decline is likely driven by a higher base effect and continued weak consumer sentiment

🔃During the week, China's October credit data will also be released

📉The HSI and HSTECH futures indices were down 1.3% and 2.1% respectively on Friday, after Chinese exports unexpectedly fell in October.

✳✴Trending HSI and HSTECH put warrants $HSTECH 6100MBePW251230(W5SW.SI)$ (https://warrants.com.sg/tools/livematrix/W5SW) and $HSI 24200MBePW251230(JKKW.SI)$ (https://warrants.com.sg/tools/livematrix/JKKW) gained between 11% to 15% while trending call warrants $HSTECH 6400MBeCW251230(WKDW.SI)$ (https://warrants.com.sg/tools/livematrix/WKDW) and $HSI 28200MBeCW251230(IXBW.SI)$ (https://warrants.com.sg/tools/livematrix/IXBW) lost 20% and 18% respectively

🇺🇸 In the US, the ongoing US federal government shutdown, which started on October 1st, is now the longest government shutdown in US history.

🚪The shutdown will continue until Congress reaches a funding agreement, which according to Bloomberg this morning, is close as a group of moderate Senate Democrats agreed to support a deal to reopen

📈The S&P500 and Nasdaq-100 December futures indices are up 0.4% and 0.6% respectively as of 847AM, following the news

✳Since its listing date on 2 September, trending S&P call warrant $S&P 6850MBeCW260320(KWTW.SI)$ (https://www.warrants.com.sg/tools/HistoricalPerformance/KWTW) has risen 49% to SGD 0.149, , almost ten times more than the S&P index's 5% climb over the same period.

✳Trending Nasdaq-100 call XJIW (https://warrants.com.sg/tools/HistoricalPerformance/XJIW ) is also up 9 times more than the Nasdaq-100 index with a 80.8% increase since its listing date versus the Nasdaq's 8.6% rally over the same period

✴The trending S&P500 and Nasdaq puts are down 30.6% and 38.8% respectively from 2 September until now.

🔍Those keen to take a view on the China-related indices of HSI, HSTECH or the US indices of S&P500 and Nasdaq-100 may wish to consider using Macquarie's trending warrants for their ability to magnify returns while requiring a lower capital outlay