ProShares Short FTSE China 50 (ARCA: YXI)

ProShares Short FTSE China 50 (ARCA:YXI), Quote.Headers.trade-ideas

ProShares Short FTSE China 50

The fund invests in financial instruments that ProShare Advisors believes, in combination, should produce daily returns consistent with the fund's investment objective. The index consists of 50 of the largest and most liquid Chinese stocks listed and traded on the Stock Exchange of Hong Kong. The fund is non-diversified.

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World Bank Warns That China&#39;s Economic Model Is Unsustainable

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Stocks were roiled Friday amid speculation that President Donald Trump is <a href="https://www.benzinga.com/news/19/09/14507636/chinese-stocks-slump-as-us-reportedly-weighs-options-to-block-investments">considering a plan</a> that would delist Chinese companies from major U.S. equity exchanges as part of a broader effort to limit U.S. access to Chinese investments.
Predictably, the headlines pressured a slew of U.S.-listed Chinese stocks. Shares of e-commerce giant Alibaba Group (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/baba#NYSE">BABA</a>) slipped 5.15%, while rival JD.com (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/jd#NASDAQ">JD</a>) plunged nearly 6%.
Even PetroChina (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/ptr#NYSE">PTR</a>), the oil giant with one of the longest-running U.S. listings of any Chinese company, lost more than 0.5%.&nbsp;
&ldquo;The deliberations come as the U.S. looks for additional levers of influence in trade talks, which resume <a href="https://www.cnbc.com/2019/09/26/china-trade-talks-set-to-resume-oct-10.html">on Oct. 10</a> in Washington,&rdquo; <a href="https://www.cnbc.com/2019/09/27/white-house-deliberates-block-on-all-us-investments-in-china.html">CNBC reported.</a>
&ldquo;Both countries slapped tariffs on billions of dollars worth of each other&rsquo;s goods. The discussions also come as the Chinese government is taking steps to increase foreign access to its markets.&rdquo;
At this point, it&#39;s speculation about whether Trump presses forward with the China delisting gambit, but if he does, the following bearish ETFs could be worth considering.
<h3>ProShares Short FTSE China 50</h3>
The ProShares Short FTSE China 50 (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/yxi#NYSE">YXI</a>) is essentially the inverse equivalent of the iShares China Large-Cap ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/fxi#NYSE">FXI</a>), one of the largest U.S.-listed China ETFs. On Friday, FXI fell 1.15%, while YXI rose by the same amount.
Since it&#39;s not a leveraged ETF, there aren&#39;t significant risks associated with holding YXI for a few days, but even if Chinese stocks fall on the delisting news, traders expecting big gains could be somewhat disappointed with YXI simply because the underlying index doesn&#39;t feature big weights to stocks like Alibaba and JD.
Chinese&nbsp;banks, which don&#39;t trade in the U.S., command nearly half the benchmark&#39;s weight.
<h3>Direxion Daily CSI 300 China A Share Bear 1X Shares</h3>
The Direxion Daily CSI 300 China A Share Bear 1X Shares (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/chad#NYSE">CHAD</a>) is another inverse, though not leveraged, ETF. Friday&#39;s 1.33% jump on light volume positions the ETF to reclaim its 200-day moving average (5.11%).
The risk with CHAD, besides the possibility of a rally by Chinese stocks, is that the components in the CSI 300 Index trade on the mainland and many don&#39;t have U.S. listings &mdash; so vulnerability to U.S. delisting chatter could be limted.
<h3>Direxion Daily FTSE China Bear 3X Shares</h3>
Alright, now we&#39;re getting somewhere. The Direxion Daily FTSE China Bear 3X Shares (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/yang#NYSE">YANG</a>) surged 3.69% on more than double the average daily volume last Friday.
YANG tries to deliver <a href="http://www.direxion.com/products/direxion-daily-china-bull-3x-etf">triple the daily inverse returns</a> of the FTSE China 50 Index, the same index YXI tracks.
For traders looking for rapid gains on the China delisting headlines, YANG could be the way to go.
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According to the World Bank and researchers associated with the Chinese government, China is at a turning point in its development path and its current growth model is unsustainable.

World Bank President Robert B. Zoellick gave opening remarks on Monday as he announced the findings of the “China 2030 Report”. Zoellick said that industrialized nations had a major stake in China's ongoing economic development because developing economies provided two thirds of the world's economic growth over the past five years. Zoellick commended China for achieving a 9.9 percent average growth rate over the past 32 years, which lifted more than 600 million people out of poverty, but warned that China could no longer count on its current development model for continued economic growth.

As developing economies like China compensated for the poor economic performance of developed nations, Zoellick said that it was important that China addressed a growing number of challenges to its economic growth, which include an aging population, pressure on global resources, environmental dangers and rising social inequality.

Zoellick praised Chinese leaders for their record of solving problems and said that the Chinese leadership recognized the need for structural reform and was asking the right questions. He said that they had passed the point of asking what needed to be done in order to continue China's economic development and were moving on to addressing how it should be done.

Zoellick said that one of the most important tasks facing China is a need to "redefine the roles of the state and the private sector, so that China can complete its transition to a market economy."

The World Bank President went on to say that "China relies on a mix of market and nonmarket measures to shape incentives for producers and consumers, and there is a lack of clarity in distinguishing the roles of government, state enterprise, and the private sector. China needs to resolve these issues"

Zoellick also stressed the importance of China putting greater emphasis on the the enforcement of intellectual property rights, so that the country could link to international research and development networks and contribute to global innovation.

Promoting greater economic equality was also mentioned as an important step in China transitioning from a middle income to a high-income country. The “China 2030 Report” said that " social policy will need to focus on establishing a welfare system appropriate for China in 2030—one that promotes human capital development, provides basic social welfare but avoids welfare dependency, and creates social conditions supportive of growth and development. Its foundation should be a basic level of security provided to all, with a particular focus on the poor."

The report also noted that improving the Chinese government's financial health would be an important part of any economic growth plan, saying that "a key challenge is to further strengthen China's fiscal system, improve fiscal sustainability, and align it with the evolving role of government to support the delivery of a large economic, social, and environmental agenda by 2030."

At a time of rising tensions between China and many of its neighbors because of a number of territorial disputes, the report also stressed the importance of China " achieving mutually beneficial relations with the rest of world."

According to the World Bank, as China becomes more interdependent with the rest of the world, "China's strategy toward the world will need to be governed by a few key principles: open markets, fairness and equity, mutually beneficial cooperation, global inclusiveness, and sustainable development."

World Bank President Robert B. Zoellick said that the economic development strategy put forth in the World Bank's report builds on China's strengths, while benefiting from international opportunities. If the new plan for Chinese economic development is successful, then the Chinese economy could continue to fuel world economic growth for the next two decades.

 

<div id="action-items">ACTION ITEMS: Bullish: Traders who believe that the economic development plan that was created by the World Bank and Chinese government researchers will help maintain China's rapid economic development up until 2030 might want to consider the following trade: <ul><li>The iShares FTSE/Xinhua China 25 Index (NYSE: <a class="ticker" href="/stock/fxi#NYSE">FXI</a>) could move higher if the Chinese economy is able to continue to grow much faster than most of the world's other economies.</li></ul>Bearish: Traders who believe that China's economy will soon begin to slow down may consider alternative positions: <ul><li>The ProShares UltraShort FTSE/Xinhua China 25 (NYSE: <a class="ticker" href="/stock/fxp#NYSE">FXP</a>) and the ProShares Short FTSE Xinhua China 25 (NYSE: <a class="ticker" href="/stock/yxi#NYSE">YXI</a>) ETFs could both benefit if China's economy begins to cool down soon. There have been a number of signs that the Chinese economy is finally being negatively affected by the worsening economic conditions of the European Union. If the euro zone recession reduces demand for Chinese products, Chinese stocks could take a hit.</li></ul>Neither Benzinga nor its staff recommend that you buy, sell, or hold any security. We do not offer investment advice, personalized or otherwise. Benzinga recommends that you conduct your own due diligence and consult a certified financial professional for personalized advice about your financial situation.</div>

World Bank Warns That China's Economic Model Is Unsustainable

Vice President Xi Jinping of China meets with President Obama on Tuesday at the White House in an effort to enhance trust between the two countries. And here is a quick look at some Chinese stocks that have risen between 15% and 25% year to date. They all are traded on U.S. exchanges, and each pays a dividend, as well.

Aluminum Corporation of China (NYSE: <a class="ticker" href="/stock/ach#NYSE">ACH</a>) is up more than 24% year to date, including up more than 14% in the past month. Factors driving aluminum prices lower, such as oversupply and economic weakness, have begun to abate. The Beijing company's long-term EPS growth forecast is 46.2%. The market cap is $7.3 billion and the dividend yield is 0.7%. Over the past six months, the stock has underperformed Alcoa (NYSE: <a class="ticker" href="/stock/aa#NYSE">AA</a>) but outperformed Alumina (NYSE: <a class="ticker" href="/stock/awc#NYSE">AWC</a>).

Huaneng Power International (NYSE: <a class="ticker" href="/stock/hnp#NYSE">HNP</a>) is trading near a 52-week high and is more almost 21% higher than at the beginning of the year. Last week, this electric utility received approval of People's Republic authorities for a coal terminal. The Beijing-based company has a market cap of $8.9 billion and its dividend yield is 4.8%. The forward earnings multiple is less than the industry average P/E. And over the past six months, the stock has outperformed peer Korea Electric Power (NYSE: <a class="ticker" href="/stock/kep#NYSE">KEP</a>).

Mindray Medical International (NYSE: <a class="ticker" href="/stock/mr#NYSE">MR</a>) shares are trading more than 15% higher year to date and about 5% below the 52-week high. The Shenzhen-based medical device maker recently said it plans to launch 7 to 10 new products for 2012. It has a dividend yield of 1.0%, the long-term EPS growth forecast is 14.2% and the operating margin is better than the industry average. Over the past six months, the stock has outperformed competitors Baxter (NYSE: <a class="ticker" href="/stock/bax#NYSE">BAX</a>) and Covidien (NYSE: <a class="ticker" href="/stock/cov#NYSE">COV</a>).

See also: <a href="http://www.benzinga.com/trading-ideas/long-ideas/12/02/2330869/how-to-profit-from-surging-chinese-prices">How to Profit from Surging Chinese Prices</a>

PetroChina (NYSE: <a class="ticker" href="/stock/ptr#NYSE">PTR</a>) shares are trading up more than 20% year to date despite a pullback late last week. Also last week, the energy giant reached a deal to acquire some assets from Royal Dutch Shell (NYSE: RDS-A). PetroChina has a market cap of $274.1 billion and the dividend yield is 3.6%. Its P/E ratio is in line with the industry average. Over the past six months, the stock has outperformed competitors Chevron (NYSE: <a class="ticker" href="/stock/cvx#NYSE">CVX</a>) and Royal Dutch Shell.

Sinopec Shanghai Petrochemical (NYSE: <a class="ticker" href="/stock/shi#NYSE">SHI</a>) is trading about 21% higher year to date but still down more than 29% from a year ago. The stock rose above its 200-day moving average last week for the first time since last May. The operating margin is higher than the industry average and the P/E ratio is less than the industry average. The $2.9 billion market cap company has a dividend yield of 3.9%. But the stock has underperformed larger competitor PetroChina over the past six months.

SouFun Holdings (NYSE: <a class="ticker" href="/stock/sfun#NYSE">SFUN</a>) rose more than 23% year to date, but the share price is about the same as a year ago. The company operates an internet portal dedicated to real estate. EPS are forecast to show a 44.4% gain for 2011, Soufun's sixth-straight year of profit improvement. The dividend yield is 11.1% and the market cap is $5.4 billion. The long-range EPS growth forecast is 36.7%. Over the past six months, the stock has outperformed competitor Sohu.com (NASDAQ: <a class="ticker" href="/stock/sohu#NASDAQ">SOHU</a>).

Yanzhou Coal Mining (NYSE: <a class="ticker" href="/stock/yzc#NYSE">YZC</a>) shares are trading more than 16% higher year to date. The Zoucheng-based company said in 2011 it would acquire Australia's Gloucester Coal. Yanzhou's dividend yield is 3.7%, the market cap is $12.1 billion and the long-term EPS growth forecast is 26.4%. It has a return on equity of 33.4% and its operating margin is higher than the industry average. But the stock has underperformed BHP Billiton (NYSE: <a class="ticker" href="/stock/bhp#NYSE">BHP</a>) over the past six months.

See also: <a href="http://www.benzinga.com/trading-ideas/long-ideas/12/02/2334902/how-to-profit-from-chinas-plunging-imports">How to Profit from China's Plunging Imports</a>

<div id="action-items">ACTION ITEMS:

Bullish: Investors interested in exchange traded funds focused on China might want to consider the following trades: 

<ul><li>Global X China Industrials ETF (NYSE: <a class="ticker" href="/stock/chii#NYSE">CHII</a>) is more than 24% higher year to date.</li>
<li>EGShares China Infrastructure (NYSE: <a class="ticker" href="/stock/chxx#NYSE">CHXX</a>) is more than 18% higher year to date.</li>
<li>Global X China Materials ETF (NYSE: <a class="ticker" href="/stock/chim#NYSE">CHIM</a>) is more than 16% higher year to date.</li>
<li>Guggenheim China All-Cap (NYSE: <a class="ticker" href="/stock/yao#NYSE">YAO</a>) is more than 15% higher year to date.</li>
</ul>Bearish: Traders may prefer to consider these alternative positions:

<ul><li>ProShares Short FTSE China 25 (NYSE: <a class="ticker" href="/stock/yxi#NYSE">YXI</a>) is trading just above a 52-week low.</li>
<li>ProShares UltraShort FTSE China 25 (NYSE: <a class="ticker" href="/stock/fxp#NYSE">FXP</a>) is trading just above a 52-week low.</li>
<li>Direxion Daily China Bear 3X Shares (NYSE: YANG) is trading just above a 52-week low.</li>
</ul>Neither Benzinga nor its staff recommend that you buy, sell, or hold any security. We do not offer investment advice, personalized or otherwise. Benzinga recommends that you conduct your own due diligence and consult a certified financial professional for personalized advice about your financial situation.</div>

Most Asian stock markets fell on Monday as traders reacted to the news that North Korean dictator Kim Jong Il died over the weekend.

Although few foreigners will mourn the passing of the North Korean leader, the markets were understandably rattled over concerns that his passing will create a power vacuum within the country. The North Korean government has always depended on absolute rule over the country in order to maintain its position of power but it is unclear how much control heir apparent Kim Jong Un will have over the country. The son of Kim Jong Il has been being groomed to take over the leadership of the country but he isn't even thirty yet, so it's unknown how loyal senior military officials will be to the young Kim Jong Un.

South Korean financial markets are already some of the world's most volatile because of frequent negative news concerning the country's relations with its isolated northern neighbor. News of ship sinkings, artillery barrages and nuclear bomb tests by North Korea often cause the South Korean stock market and the country's currency to drop. Since little is known about Kim Jong Un, the world has no idea what to expect from North Korea's new leader.

If he manages to stay in power and continues to employ the tactics often used by his father Kim Jong Il, Kim Jong Un could resort to all sorts of provocative moves in order to show foreign governments that he is in control and must be treated with respect. More missile and nuclear bomb tests could be coming and there could even be more military confrontations between North and South Korea.

Over the past couple of years North Korea has conducted artillery barrages against a South Korean island and even sunk a South Korean naval vessel. South Koreans usually react with outrage to North Korean attacks but stop short of escalating the violence to a full scale war. If Kim Jong Un resorts to similar tactics, South Korea might feel that it's necessary to show the new leader that it will no longer allow North Korean attacks to go unanswered, which could lead to an all out war.

The American government has often called on China to do more to ease tensions on the Korean peninsula but the Chinese have their own agenda. Although it's not stated to be official policy, China does not want a reunited, nuclear-armed Korea that is friendly with Western governments and has a large well trained army sitting on its border. So China can't be counted on to be a stabilizing influence during this time of transition and it might do everything within its power to keep North Korea from reuniting with its southern neighbor.

Most indexes of Asian stocks were down significantly by the end the trading day in Asia.

The KOSPI Composite Index of of Korean stocks plummeted 63.03 points, or 3.43%%, to 1,776.93 by the end of the trading on Monday in Seoul.

The Taiwan Capitalization Weighted Stock Index, or the TSEC weighted index, dropped 151.76 points, or 2.24%%, to 6,633.33 during Monday trading in Taipei.

The Straits Times Index fell 41.13 points, or 1.55%%, to finish Monday trading in Singapore at 2,618.09.

The Nikkei 225 index of Japanese stocks was was down 105.60 points, or 1.26%%, to end Monday trading at 8,296.12.

The Hang Seng Index of Hong Kong traded stocks fell 215.18 points, or 1.18%%, to 18,070.21 on Monday.

Chinese stocks were among the best performers in Asia, as the SSE Composite Index of Chinese stocks was down just 6.60 points, or 0.30%%, to 2,218.24 during trading in Shanghai.

It's still unclear how the death of Kim Jong Il will affect the future of the two Koreas. While there is great risk of short term volatility, Kim Jong Il's passing could lead the way to reforms that open up the North Korean economy or even a reunification with South Korea.

ACTION ITEMS: Bullish: Traders who believe that the death of Kim Jong Il is a positive development might want to consider the following trades: 

<ul><li>Korean stocks like POSCO (NYSE: <a class="ticker" href="/stock/pkx#NYSE">PKX</a>) and SK Telecom (NYSE: <a class="ticker" href="/stock/skm#NYSE">SKM</a>) could climb in value after the current period of uncertainty passes. Korean stocks are taking a beating because of the risks associated with the death of Kim Jong Il. These stocks could be a bargain at their current levels if Kim Jong Il's passing proves to be a long term positive event for South Korea.</li></ul>

<ul><li>Traders who prefer the lower risk offered by diversification might want to buy the iShares MSCI South Korea Index (NYSE: <a class="ticker" href="/stock/ewy#NYSE">EWY</a>).</li></ul>

Bearish: Traders who believe that the death of Kim Jong Il will raise tensions between North and South Korea may consider alternate positions: 

<ul><li>Asian markets have reacted badly to the news, so ETFs like the ProShares UltraShort MSCI Japan (NYSE: <a class="ticker" href="/stock/ewv#NYSE">EWV</a>), the ProShares Short FTSE China 25 (NYSE: <a class="ticker" href="/stock/yxi#NYSE">YXI</a>), the ProShares Ultrashort FTSE China 25 (NYSE: <a class="ticker" href="/stock/fxp#NYSE">FXP</a>) and the Direxion Daily China Bear 3x Shares (NYSE: <a class="ticker" href="/stock/czi#NYSE">CZI</a>) could all climb higher if Asia is headed for an era of increased volatility. Tensions have also been rising between China and many of its regional neighbors over territorial disputes, so the markets will be increasingly weary over the possibility between the two Koreas or China and its neighbors.</li></ul>

<ul><li>The PowerShares DB US Dollar Index Bullish (NYSE: <a class="ticker" href="/stock/uup#NYSE">UUP</a>) could also climb higher if concerns over the North Korean succession lead to traders moving more money into US dollars.</li></ul>

Neither Benzinga nor its staff recommend that you buy, sell, or hold any security. We do not offer investment advice, personalized or otherwise. Benzinga recommends that you conduct your own due diligence and consult a certified financial professional for personalized advice about your financial situation.

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How to Trade Following the Death of Kim Jong Il

A disturbing trend may be emerging among Chinese regulators, as another respected American company is being accused this week of causing harm to Chinese children.

Chinese authorities had earlier said that American battery manufacturer Johnson Controls (NYSE: <a class="ticker" href="/stock/jci#NYSE">JCI</a>) was responsible for a number of lead poisoning cases in Shanghai. Now they are accusing none other than Coca-Cola (NYSE: <a class="ticker" href="/stock/ko#NYSE">KO</a>) of selling milk products that have caused the death of a young boy and sickened his mother in the city of Changchun, the capital of Jilin province.

According to China Daily the father of the boy said that his wife and son fell sick shortly after drinking a bottle of Minute Maid strawberry flavored milk. The boy died after being rushed to the hospital with his mother by ambulance and the mother fell into a coma before recovering consciousness. Authorities reportedly said that they found traces of pesticides in bottles of strawberry flavored milk consumed by the boy, his mother and two other people who were sickened in a separate incident. 

Coca-cola spokeswoman Joanna Price said that Coca-cola tested samples from the same batch that the boy and his mother drank from and that they found them to be safe for human consumption. However, the company agreed to remove the product from store shelves while further investigations are carried out.

While it's easy to target a famous American company, if the milk product was contaminated, it's much more likely that one of Coca-cola's Chinese suppliers is responsible for the allegedly contaminated milk. Chinese milk producers have a horrible safety record and have gone so far as to attempt a cover up of unsafe milk products that sickened thousands of Chinese babies.

Chinese milk producers often put chemical additives into their products that are intended to fool regulators into thinking that the milk contains more protein than it actually does. Despite this, Chinese dairy producers have been successful in getting new safety regulations passed that are much weaker than international standards and even lower than the previous Chinese standards that proved unsuccessful in protecting Chinese consumers.

Now the same authorities that failed to protect consumers from Chinese dairy producers in the past seem to be targeting the world's most famous soft drink maker, which also has a great safety record. It's still unclear whether or not Chinese authorities are even investigating Coca-cola's Chinese suppliers.

The Coca-cola investigation comes at the same time that Chinese regulators are accusing American battery manufacturer Johnson Controls (<a class="ticker" href="/stock/jci#">JCI</a>) of business practices that have caused lead poisoning in a number of children near its battery manufacturing plant. Johnson Controls is still under investigation by Chinese regulators despite the fact that an investigation by the China Electric Equipment Industry Association found that a nearby waste recycling facility was the source of the high lead levels. The company's Shanghai manufacturing plant was also named a national model enterprise for occupational health and safety.

The accusations against Coca-cola be shouldn't be taken lightly because cases like this can result in the death penalty in China. So it must be disturbing for foreign businesses in China to watch as two well regarded international companies find themselves under investigation for safety problems that are most likely being caused by local Chinese companies. The business environment in China has always been difficult for foreign companies but it looks like it could be getting worse.

ACTION ITEMS: Bullish: Traders who believe that Coca-cola and Johnson Controls will be vindicated might want to consider the following trades: 

<ul><li>Traders could buy shares of either company if they feel that they will eventually prove their innocence.</li></ul>

Bearish: Traders who believe that feel that the two cases are a sign of worsening business environment for foreign companies in China may consider alternate positions: 

<ul><li>Chinese consumers and the Chinese economy will be the big losers if China tries to blame its long running safety problems on foreign businesses. If the trend continues, ETFs like the ProShares Short FTSE China 25 (NYSE: <a class="ticker" href="/stock/yxi#NYSE">YXI</a>), the ProShares Ultrashort FTSE China 25 (NYSE: <a class="ticker" href="/stock/fxp#NYSE">FXP</a>) and the Direxion Daily China Bear 3x Shares (NYSE: <a class="ticker" href="/stock/czi#NYSE">CZI</a>) could climb higher as the Chinese economy suffers.</li></ul>

Neither Benzinga nor its staff recommend that you buy, sell, or hold any security. We do not offer investment advice, personalized or otherwise. Benzinga recommends that you conduct your own due diligence and consult a certified financial professional for personalized advice about your financial situation.

Coke Gets the Blame for Well Known Chinese Problem

According to reports in the Chinese media over the weekend, Chinese Premier Wen Jiabao vowed to keep China's exchange rate with the United States dollar stable in order to help China's exporters. The remarks from the Chinese Premier were probably aimed at U.S. lawmakers as much they were meant for Chinese exporters.

China has been accused of manipulating its currency for years in what critics say is an effort to make Chinese exports artificially cheaper than competing products from other countries. American critics of Chinese monetary policy have been particularly vocal, with some saying that the artificially low exchange rate has cost America millions of jobs.

Last week the United States Senate voted in favor of punishing country's that manipulate their currencies to the detriment of American businesses. However, the vote was mostly symbolic because the House of Representatives is unlikely to pass the measure. Still, China's reaction to recent talk in the United States Congress of punishing countries accused of currency manipulation has been fierce.

Many Chinese officials have said that such a move by the United States Congress could set off a trade war between the world's two biggest economies. Chinese critics of the move to punish currency manipulators say that instead of blaming China for the United States' economic problems, American leaders would be better off addressing America's own economic problems, such as its low savings rate and dependence on debt.

The move to punish currency manipulators comes at a sensitive time in China. Although China still boasts rapid economic growth, the country has also been dealing with inflation rates so high that many Chinese feel that they are not benefiting from their country's booming economy. With the cost of living on the rise, many employers have been forced to increase wages. China's exporters have been complaining that rising costs of materials and labor have hurt their profit margins.

It was in response to this situation and the tough talk from Washington that Chinese Premier Wen Jiabao said that he would offer more support to the country's exporters, including "a basically stable exchange rate", according to China's official Xinhua News Agency.

The Chinese Premier's vow not to buckle to international pressure to let the value of the Chinese yuan appreciate is good news for Chinese exporters. For those who prefer the risk reduction that comes from buying a wide range of Chinese stocks instead of just a few individual stocks, there are several ETFs to choose from, such as the iShares FTSE China 25 Index Fund (NYSE: <a class="ticker" href="/stock/fxi#NYSE">FXI</a>), Guggenheim China Small Cap Index (NYSE: <a class="ticker" href="/stock/hao#NYSE">HAO</a>) and the Direxion Daily China Bull 3x Shares (NYSE: CZM).

While China has been able to resist much of the pressure to let the value of the Chinese yuan rise, it could become more difficult to do because so many developed economies are facing recession. With many European countries struggling and a few like Greece facing possible defaults, there will be more international pressure on China to abandon its long held currency policies. If China finally lets the yuan fluctuate freely, the country's economic growth could slow. If that happens, ETFs like the ProShares Short FTSE China 25 (NYSE: <a class="ticker" href="/stock/yxi#NYSE">YXI</a>), ProShares Ultrashort FTSE China 25 (NYSE: <a class="ticker" href="/stock/fxp#NYSE">FXP</a>) and the Direxion Daily China Bear 3x Shares (NYSE: <a class="ticker" href="/stock/czi#NYSE">CZI</a>) could move higher.

How to Profit from the Chinese Vow to Maintain Exchange Rate Policy

The Asian Development Bank (ADB) announced on Wednesday that it expected slower economic growth for Asian economies than it had predicted earlier this year.

The Asian Development Bank forecast growth for Asia (excluding Japan) of 7.5 percent in both 2011 and 2012, which was down slightly from its previous forecast of 7.8 growth for 2011 and 7.7 percent for 2012. Although the growth figures were down, they were still much higher than in the developed economies of Japan, the United States and Europe.

While most Western economies are struggling, Asian economies continue to grow at levels unheard of in the West. Although the troubles that Western economies are dealing with have caused Asian economies to grow at a slower rate, the region's countries are trading more amongst themselves and promoting more domestic demand. This should allow them to continue growing rapidly compared to their Western trading partners.

However, the Asian Development Bank did warn that a default by Greece could hit Asia's export-driven economies particularly hard. The ADB's 7.5 percent growth figures did not include the possibility of a Greek default. If a Greek default were to occur, the Asian Development Bank said that the rapidly growing Asian economies could suffer.

There are a number of ways to trade on the Asian Development Bank's report that Asian economies are growing slower than expected.

Although news of an economic slowdown is usually bad, the Asian economies are still growing at a brisk pace. The slowing pace of growth could actually relieve some of the inflationary pressure being felt across the region. This could give the countries' central bankers more options in the event of a default by Greece or one of the other troubled eurozone countries.

With economies that are expected to grow 7.5 percent over the next two years, Asian equities could be an attractive investment sector. Whether or not Greece defaults, the United States and Europe will struggle with growth. On the other hand, it looks like in the long run Asian economies will do relatively well compared to their Western trading partners regardless of what happens to Greece.

There are a number of options worth considering if one wants to profit from Asia's rapid economic growth. The iShares MSCI South Korea Index (NYSE: <a class="ticker" href="/stock/ewy#NYSE">EWY</a>), iShares FTSE China 25 Index Fund (NYSE: <a class="ticker" href="/stock/fxi#NYSE">FXI</a>) and the iShares MSCI Taiwan Index Fund (NYSE: <a class="ticker" href="/stock/ewt#NYSE">EWT</a>) ETFs allow investors to buy a wide range of leading companies in each of the ETF's respective countries. There's also the iShares MSCI All Country Asia ex Japan Index (Nasdaq: <a class="ticker" href="/stock/aaxj#Nasdaq">AAXJ</a>) ETF for investors who want to buy a single security that gives them exposure to companies from across the entire region.

Still, a default by Greece is looking more and more likely and the Asian Development Bank did say that a Greek default could do a lot of harm to Asian economies. Asian stocks have dropped lower repeatedly this year whenever there was talk of possible American or European defaults. Investors who feel that Asian stocks will be headed for a fall after a soon to come Greek default should consider the ProShares Short FTSE China 25 (NYSE: <a class="ticker" href="/stock/yxi#NYSE">YXI</a>) or the ProShares Ultrashort FTSE China 25 (NYSE: <a class="ticker" href="/stock/fxp#NYSE">FXP</a>) ETFs. If a Greek default sends Asian shares plummeting, these ETFs should climb higher.

iShares MSCI Alluntry Asia ex Japan Index Fund

AAXJ

How to Trade on News of Slowing Asian Growth

The governments of Italy and Spain are breathing a sigh of relief as a bond purchasing market intervention by the European Central Bank (ECB) has pushed down yields on bonds issued by the two troubled eurozone members.

The European Central Bank's previous efforts to keep the yields of troubled eurozone members' bonds from skyrocketing was limited to the much smaller countries of Greece, Ireland and Portugal.

However, the growing concerns over the fiscal and economic stability of Spain and Italy caused investors to worry that if either of the two countries were to fall into a financial crisis that the size of their deficits would be too big for the European Union to be able to bail them out like it did Greece, Ireland and Portugal.

Yields of the two countries' bonds began climbing higher last week and they were expected increase even further after Standard &amp; Poor's downgraded its rating of American debt on Friday of last week.

Italian Prime Minister Silvio Berlusconi helped to avert disaster by promising on Friday night to speed up financial reforms and to balance the Italian budget by 2013, a year earlier than was previously planned.

It was a bold move by Berlusconi who has tried to stay out of the limelight recently because he is dealing with legal charges against him involving underage prostitution and corruption.

The European Central Bank seemed to approve of Berlusconi's plans to speed up reform and deficit reduction, and decided to intervene in the bond market in support of the governments of Spain and Italy.

The European Central Bank hopes that its show of support will scare off the bears and be enough to keep the borrowing costs of Italy and Spain from climbing higher.

So far the European Central Bank's market intervention is working, as the of yields Italian and Spanish bonds have dropped.

In a strange twist, Spain and Italy may have actually benefited from Standard &amp; Poor's downgrade of American debt because it has fueled fears that Western countries will fall into recession as they cut spending to fix their deficit problems.

Since it seems like the United States and the European Union are serious about reducing their budget deficits, bonds are becoming much more attractive than stocks in the face of a looming recession.

Evidence of this was seen as stock markets from Asia to Europe tanked while the cost of borrowing for eurozone countries was improving.

There were echoes of Greece as members of the Italian opposition accused Prime Minister Berlusconi of selling out Italy in favor of the European Central Bank and other international financial institutions.

However, it's likely that the Italian opposition will do as the Greek opposition did and allow the reforms to continue because of the very real risk that Italy could end up defaulting if it doesn't balance its budget soon.

Investors who feel that the intervention of the European Central Bank has restored faith in the European Union's commitment to preventing any eurozone countries from defaulting might want to take a look at the CurrencyShares Euro Trust (NYSE: <a class="ticker" href="/stock/fxe#NYSE">FXE</a>) ETF.

The move by the ECB has already achieved the desired result and traders who are thinking about betting against the euro may think twice now that they know that European Central Bank is committed to defending member states, no matter their size.

Investors who feel that there will be a continued flow of funds out of stocks and into bonds might want to consider the ProShares UltraShort S&amp;P500 (NYSE: <a class="ticker" href="/stock/sds#NYSE">SDS</a>), the ProShares UltraShort MSCI Europe (NYSE: <a class="ticker" href="/stock/epv#NYSE">EPV</a>) or the ProShares Short FTSE China 25 (NYSE: <a class="ticker" href="/stock/yxi#NYSE">YXI</a>).

If stock prices around the world continue to tumble, these ETFs are alternatives to investing in a turbulent bond market.

The Swiss Franc is currently the safe haven currency of many investors because there is still so much uncertainty regarding the finances of the United States and eurozone governments.

The CurrencyShares Swiss Franc Trust (NYSE: <a class="ticker" href="/stock/fxf#NYSE">FXF</a>) is an easy way for investors to move part of their portfolios into a currency backed by a government that prides itself on fiscal responsibility.

Bonds

Downgrades

Financing

Treasuries

Analyst Ratings

How to Profit from EU Market Intervention into Spain and Italy Bond Markets

Several Asian stock market indexes hit 52-week lows during trading on Monday in Asia, the first day of trading after Standard &amp; Poor's lowered its rating of United States government debt.

While much of the selloff in Asian stocks could be blamed on the Standard &amp; Poor's move to lower its rating of American debt from AAA to AA+, there's also growing anxiety over the slow the pace of economic growth throughout the Western world.

As the United States and troubled eurozone countries like Greece, Ireland, Portugal and Spain reduce spending in the midst of slow economic growth and high unemployment rates, there's growing concern that the world may be headed for another financial crisis or years of recession.

Asia's most dynamic economies depend on exports to the United States and Europe for much of their economic activity.

Any slowdown or recession in the West is sure to put a break on the surging economies of East Asia.

In a move that some may see as ironic, many investors are moving money away from Asian stocks and into U.S. Treasuries because they see U.S. Treasuries as a safer investment than Asian stocks after Friday's downgrade.

Although the image of U.S. Treasuries has been tarnished, they're benefiting from the selloff of Asian stocks and yields on Treasuries are actually dropping as investors flee riskier Asian equities for the perceived safety of American debt.

Every major Asian stock market index saw steep declines during Monday trading, with several of them reaching 52-week lows.

The TSEC weighted index of Taiwanese stocks once again led the declining indexes of Asia, plummeting a further 300.33 points, or 3.82%, to reach 7,552.80 by the end of Monday .

The KOSPI Composite Index of Korean stocks was also hard hit, falling 74.30 points, or 3.82%, to end the Monday trading session at 1,869.45.

The SSE Composite Index of stocks traded on the Shanghai Stock Exchange fell 99.61 points, or 3.79%, to end Monday trading at 2,526.82 and at one point reached a 52-week low of 2,497.92.

The Straits Times Index of the Singapore stock market finished 110.78 points lower, or 3.70%, to end the day at 2,884.00, after reaching a 52-week low of 2,847.00.

The Nikkei 225 index of Japanese stocks was down 202.32 points, or 2.18%, to end Monday trading at 9,097.56.

The Hang Seng Index of Hong Kong traded stocks plunged 455.57 points, or 2.17%, to end the day at 20,490.57, after hitting a 52-week low of 20,044.37.

Investors who feel that Asian stock may bare the brunt of economic pain from a coming worldwide recession may should take a look at the ProShares UltraShort MSCI Japan (NYSE: <a class="ticker" href="/stock/ewv#NYSE">EWV</a>), the ProShares UltraShort MSCI Pacific (NYSE: <a class="ticker" href="/stock/jpx#NYSE">JPX</a>), the ProShares Short FTSE China 25 (NYSE: <a class="ticker" href="/stock/yxi#NYSE">YXI</a>), and the ProShares UltraShort FTSE China (NYSE: <a class="ticker" href="/stock/fxp#NYSE">FXP</a>).

In the event that Asian stock markets continue their fall, each of these ETFs should climb higher.

Many investors may see last week's compromise between President Barack Obama and Congressional leaders to raise the debt ceiling and avoid a default on American debt as a sign that the American system still works and that U.S. Treasuries are still one of the safest investments in the world.

These investors might want to consider putting some of their money back into Treasuries by buying into the iShares Barclays 7-10 Year Treasury (NYSE: <a class="ticker" href="/stock/ief#NYSE">IEF</a>) ETF or the iShares Barclays 20+ Year Treasury Bond (NYSE: <a class="ticker" href="/stock/tlt#NYSE">TLT</a>) ETF.

If a recession is on the way and we face years of negative or slow economic growth, U.S. Treasuries may be the best place for part of your portfolio to sit out the coming financial storm.

For those who feel that the Fed's moves to spur economic growth in America will push the dollar down even further, the CurrencyShares Swiss Franc Trust (NYSE: <a class="ticker" href="/stock/fxf#NYSE">FXF</a>) is worth consideration because the Swiss Franc is seen as a safe haven currency.

Investors who feel that stocks and bonds are both too volatile during the current investment environment and don't want to play the currency markets might want to consider a move into commodities.

The PowerShares DB Commodity Index (NYSE: <a class="ticker" href="/stock/dbc#NYSE">DBC</a>), the SPDR Gold Shares (NYSE: <a class="ticker" href="/stock/gld#NYSE">GLD</a>) and the iShares Silver Trust (NYSE: <a class="ticker" href="/stock/slv#NYSE">SLV</a>) are three heavily traded commodity indexes for those considering buying commodities.

Commodities

Pre-Market Outlook

PowerShares DBmmodity Index Optimum Yield Diversified Fund

iShares Trust Barclays 7-10 Year Treasury Bond Fund

ProShares UltraShort MSCI Pacific ex-Japan

iShares Trust Barclays 20+ Year Treasury Bond Fund

How to Profit as Asian Stocks Hit 52-Week Lows on Standard & Poor's US Debt Downgrade

Stock markets across Asia had a dismal performance a day after the Dow Jones Industrial Average suffered its biggest single-day drop in nearly three years.

Asian stock markets started the week off on a positive note, rising after news broke that President Barack Obama and Congressional leaders had reached a compromise that prevented the United States from defaulting on its national debt.

However, as the week progressed Asian stocks fell partially over concerns that the very plan that was heralded for averting a financial crisis might push the United States into recession (as if with today's unemployment rates we aren't already in the midst of one).

The deal calls for massive spending cuts that will have the biggest impact on the consumers who depend the most on the government for a substantial portion of their discretionary income.

As benefits to these consumers are reduced, their spending will fall as well, which will hurt the export-driven economies of Asia.

There are increasing fears that the world may be headed for another global recession as the United States and many of the troubled eurozone countries slash spending during a period of slow economic growth.

The European Central Bank didn't help matters yesterday when in a show of support it intervened in the market by buying the bonds of some of the smaller troubled eurozone members, while avoiding purchasing bonds from the bigger troubled eurozone countries Italy and Spain.

The move made investors question whether or not the European Union would be able to save Italy or Spain from financial disaster the same way it prevented Greece from defaulting last month.

With the possibility of a default by the United States government eliminated for the next couple of years and growing fear of a global recession, many investors are now moving their money back into treasuries and other safe haven investments like gold.

As investors pulled their money out of Asian stock markets, the major Asian stock market indexes were down an average of nearly 4% by time that stock markets ended trading on Friday in Asia.

The TSEC weighted index of Taiwanese stocks was plummeted 464.14 points, or 5.58%, to reach 7,853.13 by the end of Friday .

The Hang Seng Index of Hong Kong traded stocks plunged 938.60 points, or 4.29%, to end the day at 20,946.14.

The Nikkei 225 index of Japanese stocks dropped 359.30 points, or 3.72%, to end Friday trading at 9,299.88.

The KOSPI Composite Index of Korean stocks fell 74.72 points, or 3.70%, to end the Friday trading session at 1,943.75.

The Straits Times Index of the Singapore stock market finished 112.23 points lower, or 3.61%, to end the day at 2,994.78.

The SSE Composite Index of stocks traded on the Shanghai Stock Exchange was one of the "better" performing Asian stock indexes during Friday trading. The SSE Composite Index fell "only" 57.62 points, or 2.15%, to end Friday trading at 2,626.42.

Investors who think that the Western economies' reduced government spending during a time of slow economic growth will lead to a global recession have a number of options to consider.

For the time being a default by the American government is no longer a major concern, so the iShares Barclays 20+ Year Treasury Bond (NYSE: <a class="ticker" href="/stock/tlt#NYSE">TLT</a>) and the iShares Barclays 7-10 Year Treasury (NYSE: <a class="ticker" href="/stock/ief#NYSE">IEF</a>) are two ETFs to consider if you want an investment that should fair better than stocks during a recession.

The ProShares Short FTSE China 25 (NYSE: <a class="ticker" href="/stock/yxi#NYSE">YXI</a>), ProShares UltraShort FTSE China (NYSE: <a class="ticker" href="/stock/fxp#NYSE">FXP</a>), the ProShares UltraShort MSCI Japan (NYSE: <a class="ticker" href="/stock/ewv#NYSE">EWV</a>) and the ProShares UltraShort MSCI Pacific (NYSE: <a class="ticker" href="/stock/jpx#NYSE">JPX</a>) are all ETFs that will benefit if a recession sends Asian stock prices plummeting further.

The SPDR Gold Shares (NYSE: <a class="ticker" href="/stock/gld#NYSE">GLD</a>), the PowerShares DB Commodity Index (NYSE: <a class="ticker" href="/stock/dbc#NYSE">DBC</a>) and the CurrencyShares Swiss Franc Trust (NYSE: <a class="ticker" href="/stock/fxf#NYSE">FXF</a>) are ETFs worth a look by investors looking for an alternative to stocks and bonds.

Although US treasuries seem like a safer bet than just a week ago, the United States still faces the possibility of losing its top rated credit rating and was even downgraded by Chinese rating agency Dagong Global Credit Rating earlier this week.

The long term outlook for American bonds still doesn't look good, so moving money into commodities or a safe haven currency like the Swiss Francs may be a good move.

How to Profit as Asian Stocks Plummet over Fears of Global Recession

Three countries in East Africa—Uganda, Tanzania, and Kenya—are experiencing high rates of inflation.

These countries have seen their currencies depreciate severely over the past year. The currencies of Kenya and Uganda are the worst performing in Africa, year-to-date.

According to <a href="http://www.reuters.com/article/2011/06/21/businesspro-us-eastafrica-currencies-idUSTRE75K49W20110621">Reuters</a>, analysts are predicting additional selling pressure on the African currencies unless short-term interest rates in the economies of these nations jump.

Uganda is taking steps to combat its currency's depreciation. <a href="http://www.bloomberg.com/news/2011-06-21/ugandan-central-bank-sells-dollars-to-stabilize-its-foreign-exchange-rate.html">Bloomberg</a> reported on Tuesday that Uganda's central bank sold U.S. dollars to strengthen the Ugandan shilling.

The currencies may be depreciating due to the nations' reliance on foreign imports.

Traders may view these economies as relatively unimportant. They are certainly minuscule on a global scale. However, the economics being experienced in these countries might shed some light on what is to come for major economies.

Uganda is selling its stockpile of dollars to prop-up its currency and therefore reduce inflation. 

China is currently experiencing a massive inflationary problem and has a large stockpile of dollars. Would China, like Uganda, <a href="http://www.benzinga.com/etfs/commodities/11/06/1146695/chinese-could-alter-entire-forex-market-in-next-few-weeks">sell dollars</a> to stave off inflation in its economy?

Data released on Tuesday showed that <a href="http://www.benzinga.com/markets/bonds/11/06/1188093/china-favors-european-debt-over-us">China has already</a> reduced the rate at which it is acquiring new dollar denominated assets. Instead, China is opting to purchase European assets with the fruits of its large trade deficit.

Should China opt to sell down its dollar stockpile, it could tremendously depreciate the U.S. dollar while simultaneously causing an <a href="http://www.benzinga.com/trading-ideas/long-ideas/11/06/1179976/potential-chinese-announcement-on-june-19th-might-shakeup-for">appreciation in its</a> own currency, the yuan. In that case, U.S. consumers might have a difficult time making ends meet. An appreciating yuan and depreciating dollar may lead to higher fuel costs and more expensive prices at large Chinese importers like Wal-Mart (NYSE: <a class="ticker" href="/stock/wmt#NYSE">WMT</a>).

Of course, that might have a severe negative effect on China's economy, as it would make it more difficult for China to export. Thus, China may resist selling dollars for the time being. 

Still, in the long run, they may have no other choice.

Action Items

Bullish: Traders who believe that China will follow Uganda's lead one day, and sell dollars, might want to consider the following trades: 

<ul><li>Buy Wisdom Tree Dreyfus Chinese Yuan Fund (NYSE: <a class="ticker" href="/stock/cyb#NYSE">CYB</a>) in a long yuan play. If China moves to appreciate its yuan to stem inflation, CYB may do well.</li><li>Short Power Shares DB US Dollar Bullish Index (NYSE: <a class="ticker" href="/stock/uup#NYSE">UUP</a>) in a short dollar play. If China sells U.S. dollars, the dollar could suffer, and UUP may do poorly.</li></ul>

Bearish: Traders who believe that China will be forced to sit on its dollar assets to protect its exports may consider taking positions in the following: 

<ul><li>iShares Lehman Aggregate Bond (NYSE: <a class="ticker" href="/stock/agg#NYSE">AGG</a>) is a long play on U.S. bonds. If China continues to stockpile dollar-denominated assets, AGG may be a smart investment.</li><li>ProShares Short FTSE China 25 (NYSE: <a class="ticker" href="/stock/yxi#NYSE">YXI</a>) is a short China play. If the Chinese economy does well, YXI may rally sharply.</li></ul>

Neither Benzinga nor its staff recommend that you buy, sell, or hold any security. We do not offer investment advice, personalized or otherwise. Benzinga recommends that you conduct your own due diligence and consult a certified financial professional for personalized advice about your financial situation.

Could East African Bankers Solution to Inflation Foreshadow China's?

The Asian-Pacific currencies are moving higher against the U.S. dollar on Tuesday, after China published data showing its booming economy is not slowing down.

It was a big day for China as the Asian giant posted data on the strength of its retail sector, industrial production and inflation. The Chinese <a href="http://uk.finance.yahoo.com/news/FOREX-Euro-Aussie-edge-China-targetukfocus-1692147366.html?x=0">consumer price index rose</a> 5.5% in May, slightly above Reuters consensus estimate and to the highest point in almost three years. In spite of rising inflation, traders seemed to also be relieved as some feared even higher May inflation figures, which would press the Chinese authorities to tighten their monetary policies even further. 

To add more evidence to just how strong the Chinese economy is, China's <a href="http://af.reuters.com/article/energyOilNews/idAFL3E7HE0CA20110614">industrial production</a> rose 13.3% in May, compared to a year earlier, beating analysts' expectations of 13.2%. China is the world's largest exporter and the overall strength of its economy relies a lot on the performance of its exports-oriented manufacturing sector. 

China has been urged not to rely only on overseas demand, however, but to try to boost domestic spending as well. China's efforts seem to be working, as its <a href="http://www.chinaknowledge.com/Newswires/News_Detail.aspx?type=1&amp;cat=INS&amp;NewsID=43657">retail sales</a> rose by 16.9% in May, compared to a year earlier, slightly down from 17.1% recorded in April.

The Asian-Pacific currencies responded positively to the news. At around 6:30 am GMT The greenback lost ground against the Chinese yuan, falling 0.1% to 6.4772. The news will be welcomed by the U.S. authorities and the U.S. producers, as both have claimed for a long time that the Chinese currency has been kept undervalued in order to provide competitive edge to China's exporters. 

The U.S. dollar fell 0.29% against the Singapore dollar and is currently trading around 1.2327. The dollar suffered its biggest losses against the South Korean Wong, however, sliding 0.38% to 1082.6801.

Big gains were made by the Aussie and the Kiwi as well. Australia and New Zealand are big exporters of commodities and China is the world's biggest consumer of commodities. Therefore, it is not surprising that traders seem to view good news for the Chinese economy as good news for the economies of Australia and New Zealand. The dollar lost 0.33% against the Aussie to trade around 0.9399 and 0.25% against the Kiwi to stand at 1.2232.

The only Asian-Pacific currency that failed to gain some ground against the U.S. dollar was the Japanese yen. The greenback added 0.07% to its value against the Japanese currency to trade around ¥80.3050. The yen failed to find strength in the upward revision of its April industrial production data. According to <a href="http://jen.jiji.com/jc/eng?g=eco&amp;k=2011061400438">new estimates</a>, the Japanese industrial production in April was 1.6% higher than a month earlier, up from the initial estimate of 1%. 

It seems that traders were not too impressed with the upward revision, as fears persist that supply disruptions will continue to take its toll on the Japanese economy after a devastating earthquake and tsunami.

Traders who believe the Chinese economy will continue to be strong will be interested in the iShares FTSE/Xinhua China 25 Index Fund (NYSE: <a class="ticker" href="/stock/fxi#NYSE">FXI</a>) and the Direxion China Bull 3X - Triple-Leveraged ETF (NYSE: CZM). Strong Chinese economy will also provide a tailwind to the economies of Australia and New Zealand, as the Chinese economy relies a lot on imports of commodities from these countries. Therefore, traders who believe in the scenario of a continuing boom for the Chinese economy might be also interested in the CurrencyShares Australian Dollar Trust ETF (NYSE: <a class="ticker" href="/stock/fxa#NYSE">FXA</a>) and the WisdomTree Dreyfus New Zealand Dollar Fund (NYSE: <a class="ticker" href="/stock/bnz#NYSE">BNZ</a>).

Some traders might think that China will not be able to control its inflation and that the country's boom might soon turn into bust. These traders will be interested in the ProShares Short FTSE/Xinhua China 25 Index ETF (NYSE: <a class="ticker" href="/stock/yxi#NYSE">YXI</a>) and the Direxion China Bear 3X - Triple-Leveraged ETF (NYSE: <a class="ticker" href="/stock/czi#NYSE">CZI</a>).

Wisdom tree Drefus New Zeland Dollar Fund

Asian-Pacific Currencies Gain Against U.S. Dollar on Continuing China Boom

Chinese stock prices ended Monday trading in Shanghai down 1.51% due to tighter market liquidity and concerns that the Chinese government would continue tightening monetary policy.

The Chinese government has grown increasingly concerned over inflationary pressures facing the country's economy.

Inflation rose an unexpectedly high 5.4% in March from the same month a year earlier and in February inflation was up 4.9%.

As inflation continues to climb, investors are wondering how much higher it could go, which is fanning the fear that there is a lot more tightening needed to be done in order to reduce inflation.

The Chinese government is worried that resentment over its inability to keep inflation under control could lead to widespread protests like those spreading across North Africa and the Middle East.

In order to prevent such protests in China, the government has taken a number of measures to cool China's booming economy.

These measures include raising interest rates, increasing down payment requirements, raising the share of deposits that banks are required to hold in reserve, introducing property taxes used to cut into the profit of property sellers and a nearly $200 billion plan to build and renovate of 10 million low cost homes.

However, investors worry that rising oil prices prices may reduce the effectiveness of the Chinese government's efforts and that this may lead to a continued effort to tighten monetary policy.

These concerns led to the SSE Composite Index of Chinese stocks falling 45.45 points, or 1.51%, during the Monday trading session to 2,965.06.

The market volatility caused by inflationary fears provides investors with a number of investment opportunities.

The iShares FTSE China 25 Index Fund (NYSE: <a class="ticker" href="/stock/fxi#NYSE">FXI</a>) could benefit if inflationary concerns begin to fall.

If inflation continues to climb, the Chinese government is likely to continue tightening monetary policy and the ProShares Short FTSE China 25 (NYSE: <a class="ticker" href="/stock/yxi#NYSE">YXI</a>) could see a significant increase in share price.

The Global X China Materials <a href="http://www.marketbulletin.com/etf.php">ETF</a> (NYSE: <a class="ticker" href="/stock/chim#NYSE">CHIM</a>) is an ETF that may be especially sensitive to the movements of Chinese inflation rates.

CNOOC Limited (NYSE: <a class="ticker" href="/stock/ceo#NYSE">CEO</a>) is a Chinese company in the business of the exploration, development, production and sale of oil, natural gas, and other petroleum products. This is one Chinese company that should see its stock price continue to rise higher if unrest in the Middle East continues to push oil prices higher.

Intraday Update

Chinese Stocks Fall 1.51%: Trading on Inflation Fears (FXI, YXI, CHIM, CEO)

The Chinese stock market ended Thursday trading down, amid concerns about the government's plans for further tightening monetary policy in an attempt to bring inflation under control.

While most stock markets in Asia ended Thursday trading higher, the SSE Composite Index of Chinese traded stocks fell 25.88 points, or 0.88%, to 2,929.89.

Prices for food and housing have been on the rise in China for some time now and the government is under growing pressure to do something about it.

Chinese officials have looked on warily as unrest in North Africa and the Middle East first led to protests, then violent riots and eventually to the downfall of the leaders of Egypt and Tunisia and civil war in Libya.

The Chinese leadership is concerned that higher prices that have not been matched by rising incomes could lead to similar upheaval in China.

To prevent such an occurrence in China, local and federal governments have implemented a wide range of measures.

In the housing market, these plans include the building or renovation of 10 million housing units, raising minimum down payment requirements and introducing property taxes that will cut into the profit of property sellers, with the intended goal of reducing speculative investment in real estate.

The Chinese government has also raised interest rates and increased bank reserve requirements several times since last year.

If the government raises rates again, the stock market is sure take a hit.

There are several investment options available to investors depending on how they see the economic situation in China unfolding.

If the government decides to leave interest rates as they are, the iShares FTSE China 25 Index Fund (NYSE: <a class="ticker" href="/stock/fxi#NYSE">FXI</a>) should see its share price rise.

However, if interest rates are raised again, the ProShares Short FTSE China 25 (NYSE: <a class="ticker" href="/stock/yxi#NYSE">YXI</a>) is an ETF that would benefit from that news.

Although the government is trying to cool the economy, it is also increasing the supply of housing. The Global X China Materials ETF (NYSE: <a class="ticker" href="/stock/chim#NYSE">CHIM</a>) is an ETF that could climb higher because of the introduction of millions of new homes to the housing market and the rise in demand for appliances to fill all those homes.

Rumors

How to Trade on Chinese Interest Rate Hikes (FXI, YXI, CHIM)

Stock markets across Asia fell on Tuesday, as the world's financial markets continued to react to the devastation from last week's earthquake and tsunami that hit Japan.

As if the the initial damage caused by the earthquake, tsunami and fires wasn't enough, the Japanese government also has to deal with several nuclear reactors that are in danger of meltdown.

Rising radiation levels have led to the Japanese government evacuating thousands of civilians who live nearby the reactors and telling others to stay indoors in order to reduce their exposure to possibly harmful levels of radiation. The United States Navy took the threat of radiation exposure seriously enough that it repositioned ships that were sent to aid the Japanese in their recovery efforts.

Unlike most Asian companies, China's solar power companies have already seen their share prices rise because nuclear power has already become much less attractive as the problems at the Japanese nuclear power plants continue to escalate. LDK Solar Co. Inc. (NYSE: <a class="ticker" href="/stock/ldk#NYSE">LDK</a>), Hanwha SolarOne Co., Ltd. (NASDAQ: <a class="ticker" href="/stock/hsol#NASDAQ">HSOL</a>) and Trina Solar Limited (NYSE: <a class="ticker" href="/stock/tsl#NYSE">TSL</a>) are three Chinese companies in the solar power sector that will find their products and services in greater demand if the nuclear situation in Japan worsens.

With much of its nuclear generating capacity and oil refining capacity offline and Japanese multinationals like Toyota Motor Corporation (NYSE: <a class="ticker" href="/stock/tm#NYSE">TM</a>) and Sony Corporation (NYSE: <a class="ticker" href="/stock/sne#NYSE">SNE</a>) closing factories, there is real cause for concern that Japan's economy could be headed for a deep recession. Reflecting those fears, the Nikkei 225 index of Japanese stocks fell a further 1,015.34 points, or 10.55%, on Tuesday.

Stock markets all across Asia followed suit. The Taiwan Capitalization Weighted Stock Index, or the TSEC weighted index, fell 285.24 points, or 3.35%, to 8,234.78. The Hang Seng Index of Hong Kong traded stocks fell 667.63 points, or 2.86%, to 22,678.25.

Although it's hard to see how anything positive could come from the disaster that has struck Japan, it could provide some inflationary relief to China's overheating economy. The Chinese government has watched with unease as governments across North Africa and the Middle East have come under pressure from angry citizens. If there is one thing that is currently angering Chinese citizens, it's inflation.

Although China's economy has been been doing nothing but growing, so has inflation. With prices of food and housing on the rise for quite some time, the Chinese government has been taking steps to reduce inflation. With nearly a third of Japanese oil refining capacity offline and the possibility that the country's economy may not recover for quite some time, demand for oil may be down for years, which could bring down costs in China or at least slow inflation's rise.

The iShares FTSE China 25 Index Fund (NYSE: <a class="ticker" href="/stock/fxi#NYSE">FXI</a>) is an <a href="http://marketbulletin.com/etf.php">ETF</a> that would stand to benefit if the Chinese economy is not as badly affected by Japan's woes as investors currently fear.

However, if Japan's problems lead to a slowdown in China's economic growth, the ProShares Short FTSE China 25 (NYSE: <a class="ticker" href="/stock/yxi#NYSE">YXI</a>) is an ETF that investors could profit from. This ETF seeks daily investment results, before fees and expenses, that correspond to the inverse of the daily performance of the FTSE China 25 Index.

HSOL

How To Trade Radiation Fears and Falling Asian Stocks (LDK, HSOL, TSL, TM, SNE, FXI, YXI)

Rising prices continue to be a major concern in China after the government reported February inflation of 4.9%.

While the figure was not unexpected by economists, that's of little comfort to Chinese consumers who have seen the price of essentials like food and housing rising for some time now.

The Chinese government is especially worried about an upset populace as unrest has spread from North Africa to the Middle East, leading to the fall of some rulers and intense pressure on others.

China's federal and local governments have undertaken a number of measures to fight inflation, such as raising interest rates, announcing the building and renovation of 10 million homes, increasing the share of deposits that banks are required to hold in reserve, raising down payment requirements and introducing property taxes used to cut into the profit of property sellers.

The hope is that these combined efforts will be enough to hold inflation down and improve consumer sentiment.

If there is a slowdown in the Chinese economy, the ProShares Short FTSE China 25 (NYSE: <a class="ticker" href="/stock/yxi#NYSE">YXI</a>) is an <a href="http://marketbulletin.com/etf.php">ETF</a> that investors could profit from. This ETF seeks daily investment results, before fees and expenses, that correspond to the inverse of the daily performance of the FTSE China 25 Index.

Although the Chinese government is trying to slow the economy's growth, the plan to build 10 million new homes could send the Global X China Materials ETF (NYSE: <a class="ticker" href="/stock/chim#NYSE">CHIM</a>) higher. This ETF gives access to the Chinese materials and commodities sector that would benefit from increased home building and the purchase of consumer appliances and furniture associated with it.

Investors who are interested in Chinese real estate should take a look at the Guggenheim China Real Estate ETF (NYSE: <a class="ticker" href="/stock/tao#NYSE">TAO</a>). This ETF seeks investment results that correspond generally to the performance, before the Fund's fees and expenses, of an equity index called the AlphaShares China Real Estate Index, which is designed to measure and monitor the performance of the investable universe of publicly-traded companies and REITs deriving a majority of their revenues from real estate development, management and/or ownership of property in China or the Special Administrative Regions of China, such as Hong Kong and Macau.

How To Trade On Rising Chinese Inflation (YXI, CHIM, TAO)

China unexpectedly swung to a February <a href="http://marketbulletin.com/forex.php">trade</a> deficit of $7.3 billion, compared to January's trade surplus of $6.5 billion.

China's largest trade deficit in 7 years was caused by a surge of imports, while export growth was low.

The unexpected trade deficit, along with rising oil prices caused by concerns over unrest in North Africa and the Middle East, led to a fall in Chinese stock prices.

The SSE Composite Index of Chinese stocks fell 43.99 points, or 1.47%, to 2,958.16, while the Hang Seng Index of stocks traded on the Hong Kong stock exchange fell 195.22 points, or 0.82%, to 23,614.89.

Although the markets didn't take news of the surprise trade deficit well, it may not be such bad news for the Chinese economy.

The surge of imports is a sign that Chinese economic growth is being fueled not just by exports but also by internal demand, which would lead to more manageable and balanced growth for China.

Also, China has long been accused of keeping its currency artificially low in order to give the country's exporters an unfair trade advantage. The February trade deficit may help to ease tensions with governments like that of the United States that have called on China to let the Chinese yuan appreciate in order to reduce trade imbalances.

A rising yuan would also make imports cheaper and aid in the governments efforts to increase domestic consumption. The reduced inflow of foreign cash into the Chinese economy would help to ease inflationary pressures that the Chinese government <a href="http://origin.benzinga.com/trading-ideas/long-ideas/11/03/913485/how-to-trade-chinas-200-billion-home-building-plan">has been trying to deal with</a>.

Investors who would like to profit from the rise in imports into China should take a look at the Global X China Consumer ETF (NYSE: <a class="ticker" href="/stock/chiq#NYSE">CHIQ</a>), which seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the Solactive China Consumer Index.

Investors who want to invest in a company that may profit directly from increased domestic consumption might want to consider Acorn International, Inc. (NYSE: <a class="ticker" href="/stock/atv#NYSE">ATV</a>), a leading integrated multi-platform marketing company that operates one of China's largest TV direct sales businesses.

Another stock to consider is China Nepstar Chain Drugstore Ltd. (NYSE: <a class="ticker" href="/stock/npd#NYSE">NPD</a>), which is China's largest retail drugstore chain based on the number of directly operated stores.

Investors who view China's February trade deficit in a negative light should consider the ProShares Short <a href="http://marketbulletin.com/etf.php">FTSE</a> China 25 (NYSE: <a class="ticker" href="/stock/yxi#NYSE">YXI</a>), which seeks daily investment results, before fees and expenses, that correspond to the inverse of the daily performance of the FTSE China 25 Index.

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ProShares Short FTSE China 50

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ProShares Short FTSE China 50 (ARCA:YXI), Quote.Headers.trade-ideas