US & China Asset Growth

US Treasuries & Fed Outlook

• 🔥 Foreign Holdings Increase: Foreign holdings of U.S. Treasuries rose to $9.305 trillion in January, led by Japan...

Data-driven signal of robust foreign appetite for US Treasuries:

• Holdings rose to $9.305T in Jan (from $9.271T), up 8% YoY, driven by Japan...

• Chinese firms hit record FX hedging amid yuan rally threatening exports.
• Global FX derivatives reach $6.6trn ADT, fueled by volatility and...

Key actions for China asset growth:

• Trim unlisted red-chips: Beijing requires domicile changes, delaying IPOs 6+ months or forcing abandonment.
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• Shorten duration: Fed may signal rate hike risk from 50% oil surge and Iran conflict halting 1/5 global oil; expect higher inflation projections...

Actionable adjustments to shield 20% YoY asset growth from tighter-for-longer Fed policy and geo volatility:

• Overweight USD assets: Acts as hedge...

US Tax Policy Shifts

• 🔥 Washington 9.9% Income Tax: Lawmakers approved a 9.9% tax on annual personal income above $1 million, prompting...

• Reuters: Short-term policy rate volatility worth paying for longer-term stability and calmer inflation
• Fed's bark without bite strategy signals...

• Big losses hit Asia oil refiners as Middle East war upsets hedging strategies
• Hedging works only if crude cargoes arrive, runs persist, products...

• Historical lag: Over 25 years, China alone deviated from USD GDP growth as EM stock guide
• UBS forecast: MSCI China to rise 15-20% in 2026,...

Monitor state fiscal shifts to protect liquidity for 20% YoY growth:

• 9.9% tax on income >$1M starts 2029, targeting 21,000 filers for $3.5–4B annual...

• Micron (MU) completes Taiwan fab acquisition, strengthening AI memory bull case.
• Positions MU favorably for earnings this week vs. Qualcomm (QCOM) Seaport downgrade.
• Actionable: Tilt to AI infra names like MU for targeted growth exposure.

Key hedging rules from Weekly Basis Points:

• Negative correlations (e.g., US equities vs. USD): Stay unhedged to reduce volatility
• Positive...

• Tightening liquidity exposes rising defaults and illiquid valuations in multi-trillion PE/credit sectors.
• Piepenburg (ex-hedge MD) and Gundlach...

Key signals for portfolio protection amid geopolitical macro uncertainty:

• Fed likely holds rates steady March 18 due to US-Iran war and inflation...

Hedge funds aggressively shorted global financial stocks last week, most sold sector YTD per Goldman Sachs.

• S&P financials down >11% YTD; Europe...

China Economic Data

• 🔥 Fixed Asset Investment: China's year-to-date fixed asset investment rose 1.8% year-on-year in February, above the...

• Markets widely expect Fed to keep rates unchanged at 3.50%-3.75% this week
• CME FedWatch Tool data confirms high consensus on steady policy
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Positive indicators build momentum for China positioning:

• Fixed asset investment +1.8% YoY YTD Feb, beat -0.4% forecast
• GDP exceeded 140T yuan in...

Currency overlay protects international investments from exchange rate risks, vital for 20% YoY US-China growth.

• Hidden risk: Strengthening USD...