SGX: Seize China Opportunites Round-the-Clock with SGX FTSE China A50 & USD/CHN Futures
11 Oct 2019 | Category: Market Updates
FTSE China A50 and USD/CNH have become more negatively correlated since late September, strengthening from -20% to -67% as both equity and FX increasingly moved in sync on US-China trade war news-flow.
On 27 September, SGX FTSE China A50 and SGX USD/CNH future contracts saw sizable price and volume movements during late Asian hours on news of potential crackdown on US portfolio flows into China.
SGX FTSE China A50 futures price fell by 1% while SGX USD/CNH futures price increased from 7.13 to 7.15. Volumes traded in this T+1 session were twice as much as the average T+1 daily volumes in the same month. SGX FTSE China A50 futures traded 50k lots vs an average of 26k lots and SGX USD/CNH futures saw 20k lots vs an average of 15k lots.
In October, talks of restrictions on US capital flows receded as markets turned the focus to the ongoing 10-11 Oct trade talks. Post Asian market close on 9 October, SGX FTSE China A50 futures price increased by 0.6% while SGX USD/CNH futures price fell from 7.15 to 7.14 as China signaled its willingness to strike a partial trade deal.
SGX is the world’s preferred venue for China risk management tools with a 27% margin offset for spread positions between SGX FTSE China A50 and SGX USD/CNH Futures and round-the-clock liquidity.