The Direxion Daily FTSE China Bear 3x Shares ETF (YANG) is experiencing downward pressure as optimism over easing U.S.-China tensions boosts Chinese equities. A positive phone call between Donald Trump and Xi Jinping has led to a rise in Asian markets, with the MSCI Asia Pacific Index climbing 1.2% and the Hang Seng Index up 2.3%. This optimism is further supported by the strengthening of the yuan, which has influenced the appreciation of the South Korean won, often seen as a proxy for the yuan. The anticipation of improved U.S.-China trade relations has bolstered investor sentiment, despite concerns over potential policy changes under Trump's administration.
Additionally, the Chinese government's recent stimulus measures, including a reduction in the required reserve ratio for major banks, have encouraged global hedge funds to increase their exposure to Chinese stocks. This has led to a rally in Chinese equities, with significant gains in companies like JD.com and GDS Holdings. However, the looming threat of new tariffs from the Trump administration could pose challenges, as hedge funds reassess their positions in light of potential trade disruptions.
The YANG ETF is currently priced at $69.60, reflecting a 5.60% decrease from its previous close.