This was a risk management week ahead of US CPI. Technical indicators pointed to a risk unwind event: VIX spiked, futures volatility and volumes increased, but cash volumes did not. People put hedges in place and trimmed the most speculative positions. Asian policymakers were very proactive - Korea said markets are still undervalued, Indonesia clarified export controls.

What you see in the recovery is buying the stuff that makes sense, not the most speculative stuff. That is capping the nature of this rally.

Yesterday China was a safe haven, but China A got hurt. Today there is a reassessment of the China A trade. Government support is clearly behind the data center buildout - optical names are doing really well. The most speculative stuff around physical AI and AI software names in Hong Kong are struggling. The amount of risk people can add ahead of US CPI without clear government catalyst is very muted.