OK - last one on this - after yet another slap to the forehead. The indexes to USD performance ALSO accounts for the flavour of Chinese capital investment (i.e. China and Asian investment performances, as they are pegged to the USD).
There is no USD/CNYuan exchange rate, likewise for most Asian countries!!! BUT ALSO, where does Japans investment capital (in Yen) go? (apart from preying for the US mortgage market to improve)
Index charts below - - HangSeng to USD - HangSeng to JPY (value of JPYen investment into China) (historically political no go zone me thinks)
- AU All ords to JPYen (value of JPYen investment into Aust) - SPX to Jpy (value of JPYen investment into USA)
(the AORDs to USD indicates Chinese investment returns into Australia's equity markets - previously)
One might be cunning enough to extend the above thinking that what also benefits the US by having a low dollar, also benefits China and Asia. Forcing interest rates up in these contries and overinflating their assets is going to weaken them in the overall scheme of things 'IF' the USD recovers. Cycles in the USD might be more relevant.
I'm getting there, just a bit slow is all. A few more slaps to the head and avoid the cab sav for now. But this is currently all about the USD, pegged currencies, and exchange rates IMO.
The flood of money into Asia is because asset prices $curr per m2 are much cheaper than the US (aided by low USD we know), even with the collapse in US property prices. Foreign investors have kept US properties at arms length because loan contracts being uts, people walking out, abandoning the asset, flooding the market with more cheap housing nobody wants or can afford. Dismal failure:1, USA:0.
Capital flows by preference for property is going to Asia, but sharemarkets still a bit risky? Japan has floated the Yen, and is hurting because low USD, revenues suffering - where to invest for them?
It leaves China and Asia markets to hit highs also because of much better economic conditions with the low USD, and a flood of capital. Cross border capital from these countries also aids Aust markets (maybe - check charts).
It also means foreign investors are funding lazy US homeowners and the unemployed if these markets don't improve (which won't be sustainable).
Head hurts, waffling, time to check local market. pw
HANG Seng to USD (effectively to CNY also as the currency is pegged, note slightly different topping formation to SPX)
HANGSENG to JPY (indicates return on JPyen invested into China HangSeng, but least likely due to politics)
AUST ORDS to JPY (indicates return on JPYen invested into Australia markets)
SPX to JPY (indicates return on JPYen invested into USA markets)
(20min delay)