Tag Archives: China

Overview: The markets are mostly treading water ahead of the FOMC decision later today. Tech stocks tumbled in Hong Kong and the Hang Seng fell a little more than 1%, while India was the worst performer in the region falling over 2% following an unexpected and intra-meeting hike by the Reserve Bank of India.  It raised the repo rate to 4.4% from 4.0%.  Europe's Stoxx 600 is a little lower and has been unable to close the gap from Monday created from the lower...

Stagflation. It’s a word that strikes fear in the hearts of investors, one that evokes memories – for some of us – of bell bottoms, disco, and Jimmy Carter’s American malaise. The combination of weak growth and high inflation is the worst of all worlds, one that required a transformational leader and a cigar-chomping central banker to defeat the last time it came around. Or at least that’s how it’s remembered. Whether the cigar-chomping central banker was really...

Overview: The US dollar begins the new week on a firm note ahead of the mid-week conclusion of the FOMC meeting.  Many centers are closed for the May Day holiday, making for thinner market conditions.  Equities are mostly lower in the markets that traded today.  This includes Japan, South Korea, Australia, and India in the Asia Pacific.  In Europe, the Stoxx 600, led by a decline in information technology,  industrials, and consumer discretionary sectors,  is...

Overview: Speculation that a midday statement by China's Politburo signals new efforts to support the economy ahead of  next week's holiday appears to have stirred the animal spirits.  The unusual timing of the statement helped spark a rally in Asia-Pacific that lifted most of the large market by more than 1%.  Europe's Stoxx 600 has nearly completed the gap created by Monday's sharply lower opening. It is rising for the third consecutive session.  US futures are,...

Overview: Fears that the Chinese lockdowns to fight Covid, which have extended for four weeks in Shanghai, are not working, and may be extended to Beijing has whacked equity markets, arrested the increase in bond yields, and lifted the dollar. Commodity prices are broadly lower amid concerns over demand. China’s CSI 300 fell 5% today and Hong Kong’s Hang Seng was off more than 3.5%.  Most of the major markets in Asia Pacific were off more than 1%. Europe’s Stoxx 600...

For one thing, that whole Bretton Woods 3 thing is really off to an interesting start. And by interesting, I mean predictably backward. According to its loud and leading proponent, China’s yuan was supposed to be ascending while the dollar sank, its first step toward what many still claim will end up in some biblical-like abyss. Instead, CNY is doing the plummeting and at a speed reminiscent of August 2015. That month did not, obviously, lead to a vast rearrangement...

What everyone is saying, because it’s convenient, is that China’s zero-COVID policies are going to harm the economy. No. Economic harm of the past is the reason for the zero-COVID policies. As I showed yesterday, the cracking down didn’t just show up around 2020, begun right out in the open years beforehand, born from the scattering ashes of globally synchronized growth. Xi Jinping saw how a very different post-2008 global economy without any recovery was going to...

The first chapters to China’s new story now playing out in Shanghai were written down in October 2017. Planning for them had begun years earlier, their author Xi Jinping requiring more research before committing them to paper. Communist authorities there had grown increasingly concerned about the lack of growth potential for its political system by then utterly dependent for a quarter-century on the economy growing. So long as other places around the world wanted...

The month of February 2022, the calm before the latest storm. Russians went into Ukraine toward the month’s end, collateral shortage became scarcity, maybe a run right at February’s final day, and then serious escalations all throughout March – right down to pure US Treasury yield curve inversion. Given that setup, it was unsurprising to find Treasury’s February TIC data mostly unremarkable. Top to bottom, there wasn’t really much that changed. No huge negatives,...

Overview: The record-long yen slide has stalled just shy of JPY129.50, even though the Bank of Japan defended its Yield-Curve Control cap on the 10-year bond and will continue to do so for the next four sessions. The greenback fell to almost JPY128 before steadying. China again defied expectations for lower rates (loan prime rate), the yuan’s sell-off accelerated and slide to its lowest level since last October. Chinese and Hong Kong shares fell, but most of the...