China Hot Money Flows / FXI & FXP

Apparently hot money from global currency devaluation/central bank accommodative policy rushing in to the Chinese real estate market was right as property values saw the biggest gain in 2 years as buyers rushed in ahead of Chinese property curbs which include limiting single families from owning more than 1 home.

Also Chinese banks are expected to meet quarter end capital requirements, thereby increasing Chinese money supply, which sent Chinese money markets to the lows of the month.

I would expect the PBoC will engage in more liquidity draining repos on the speculation, but until they do, perhaps its time to take a look at FXI and FXP more closely. An initial peak looks like FXI is setting up to press higher on a counter trend bounce in days to come. I'll put those on the list today.

 FXP-FTSE China 25 Ultrashort 60 min chart

FXI FTSE China 25 60 min chart looking like it will bounce soon.