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,...


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