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We are trading practically at dealer max long gamma levels. SPY should start behaving slightly more sticky as dealers are offloading deltas here.
Let's see how options flow change coming days, but all things equal, SPY should enter some "stickiness" here.
Credit impulse driving most things, properties included...but note the 3 red lines having changed that relationship somewhat recently.
Nordea reminds us of:
"i) Liability-to-asset ratio (excluding advance receipts) of less than 70% ii) Net gearing ratio of less than 100% iii) Cash-to-short-term debt ratio of more than 1x If all three red lines are breached, a Real Estate developer is NOT allowed to grow the debt base at all (Evergrande has been stuck in this situation for a while)."
Numera simulates a 20% correction on property prices and reaches the conclusion:
"Our simulations reveal a 20% correction would lower global manufacturing and producer prices by around 2% one-year after the shock."
Guess we have to be China property experts for longer...