Tag Archive: China

FX Daily, January 24: Coronavirus Hits Asia Hardest, Europe and the US Resilient

Overview: The new coronavirus in China has moved into the vacuum left by the US-China trade agreement and clear indications that the Bank of Japan, the European Central Bank, and the Federal Reserve are on hold as investors searched for new drivers. The World Health Organization refrained from calling it a public health emergency even though China has dramatically stepped up its efforts to contain the new virus.

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FX Daily, January 23: ECB’s Strategic Review and the Coronavirus Command Investors’ Attention

The spread of the coronavirus and the lockdown in the epicenter in China has again sapped the risk-taking appetite in the capital markets. Asia is bearing the brunt of the adjustment. Tomorrow starts China's week-long Lunar New Year celebration when markets will be closed, which may have also spurred today's drama that aw the Shanghai Composite tumbled 2.75%, bringing the week's loss to 3.2%, the most in five months.

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FX Daily, January 21: New Respiratory Illness Saps Risk-Taking Appetites

The spread of a new respiratory illness in China has spurred a wave of profit-taking in equities and risk assets more generally. All of the markets in the Asia Pacific region tumbled, with Hong Kong hit the hardest (-2.8%) after posting a key reversal yesterday. The sell-off continued in Europe. The Dow Jones Stoxx 600 is off about 0.8% in late morning turnover, led by consumer discretionary, materials, and energy. 

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China Enters 2020 Still (Intent On) Managing Its Decline

Chinese Industrial Production accelerated further in December 2019, rising 6.9% year-over-year according to today’s estimates from China’s National Bureau of Statistics (NBS). That was a full percentage point above consensus. IP had bottomed out right in August at a record low 4.4%, and then, just as this wave of renewed optimism swept the world, it has rebounded alongside it.

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FX Daily, January 20: Stocks Stall while the Dollar Remains Bid

Overview: The new week is off to a quiet start as the US celebrates Martin Luther King's birthday, and investors look for a fresh focus. Hong Kong and Indian markets were suffered modest declines while most of the other large Asia Pacific markets edged higher. European stocks are trading a little lower, and the Dow Jones Stoxx 600 is threatening to end a four-session advance. Most benchmark bond yields around half a basis point in one direction or...

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FX Daily, January 17: China and the UK Surprise in Opposite Directions

Overview:  Helped by new record highs in the US, global stocks are moving higher today. Nearly all the markets in the Asia Pacific region advanced and the seventh consecutive weekly rally is the longest in a couple of years. Europe's Dow Jones Stoxx 600 is at new record highs and appears set to take a four-day streak into next week. US shares are trading firmly.

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FX Daily, January 16: Markets Look for New Cues with US-China Trade Pact Signed

Overview: The global capital markets are calm today as investors await fresh trading incentives. New record highs in the US equity indices gave Asia Pacific stocks a lift, though China and Taiwan were notable exceptions. Europe's Dow Jones Stoxx 600 is firm new record highs set last week.  US equities are edging higher in Europe. Benchmark bond yields are little changed.

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Clarida Picks Up Some Data

I should know better than to make declarative all-or-none statements like this. I said there isn’t any data which comports with the idea of a global turnaround, this shakeup in sentiment which since early September has gone right from one extreme to the other. Recession fears predominated in summer only to be (rather easily) replaced by near euphoria (again).

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FX Daily, January 15: Phase 1 Trade Deal Shifts Terrain of US-China Rivalry

News that US tariffs on China will remain until through at least the November US election and continued US attempts to stymie China (e.g., more curbs on Huawei under consideration and stepped up efforts to force it to cut subsidies to business) have taken some momentum from the push into risk assets. The MSCI Asia Pacific Index snapped a four-day advance today, with only Australian equities among the large regional markets able to sustain upticks. 

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FX Daily, January 14: China was a Currency Manipulator for a Few Months

Overview: The leaked US decision to lift the currency manipulator designation on China was the latest fodder fueling the new record highs in the S&P 500. The risk-taking appetite helped extend the rally in the MSCI Asia Pacific Index for the fourth consecutive session. Europe's Dow Jones Stoxx 600 is little changed and trying to snap a two-day decline.

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FX Daily, January 13: Dismal Data Undercuts Sterling and Boosts Chances of a Rate Cut

Overview: There are two big stories today. The first is the large scale protests in Iran after the government admits to accidentally shooting down the commercial airliner amid the fog of war. The market impact seems minimal but fueling speculation that this, coupled with the economic hardship related to the US embargo, could topple the regime. Second, the UK reported that the economy unexpectedly contracted in November.

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Global Headwinds and Disinflationary Pressures

I’m going to go back to Mexico for the third day in a row. First it was imports (meaning Mexico’s exports) then automobile manufacturing and now Industrial Production. I’ll probably come back to this tomorrow when INEGI updates that last number for November 2019. For now, through October will do just fine, especially in light of where automobile production is headed (ICYMI, off the bottom of the charts).

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FX Daily, January 9: Animal Spirits Roar Back

Overview:  The S&P 500 recovered from a 10-day low to reach a new record high, which set the tone for the Asia Pacific and European markets today.   The MSCI Asia Pacific Index jumped by the most in a month with the Nikkei's 2% advance leading the way.  More broadly, the markets in Taiwan, South Korea, Hong Kong, India, and Thailand all rose more than 1%.

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The Real Trade Dilemma

When I write that there are no winners around the world, what I mean is more comprehensive than just the trade wars. On that one narrow account, of course there are winners and losers. The Chinese are big losers, as the Census Bureau numbers plainly show (as well as China’s own). But even the winners of the trade wars find themselves wondering where all the spoils are.

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FX Daily, January 7: Geopolitical Angst Eases, Helps Equities and Underpins the Greenback

Overview: Without fresh escalation, investors cannot maintain a heightened sense of geopolitical anxiety.  The recovery of US shares yesterday set the tone for today's rebound in Asia and Europe. All the equity markets in the Asia Pacific region rallied today, led by a 1.6% rally in Japan and a nearly 1.4% advance in Australia, with the exception of Taiwan.

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FX Daily, January 6: Markets Struggling to Stabilize to Start the New Week

Overview: The global capital markets have yet to stabilize amid heightened geopolitical tension. Even though the US stock market finished last week off its lows, the sell-off continued in the Asia Pacific region. Japan's markets re-opened after an extended holiday, and the yen, at three-month highs, saw the Nikkei sell-off nearly 2%. Several markets in the region lost over 1%, including Taiwan, India, Thailand, and Indonesia. Europe's Dow Jones...

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FX Weekly Preview: High-Frequency Data may Underscore Four Thematic Points

Full liquidity returns to the markets gradually in the coming days, and the week ahead culminates with the US December employment report.  The highlights include the service and composite PMI readings,  and December eurozone and China's CPI.  The UK reports December PMIs,  November GDP, and industrial output figures.

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FX Daily, January 02: Equities Start New Year with a Pop

Overview:  Equities have begun New Year like, well, last year, with most Asia Pacific markets advancing, led by more than 1% gains in China, Hong Kong, and Thailand.  Only South Korea and Indonesian markets fell.  In Europe, the Dow Jones Stoxx 600 is up almost 1% in late morning turnover.  US shares are trading higher as well, and the S&P 500 is up nearly 0.6%.

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A Sour End To The 2010’s Doesn’t Have To Spoil The Entire 2020’s

It has been perhaps the most astonishing divergence in the first two decades of 21st century history. In late 2017, Western economic officials (mostly central bankers) were taking their victory laps. They took great pains to tell the world it was due to their profound wisdom, deep courage, and, most of all, determined patience, that they had been able to see their policies through to the light of day (no thanks to voters around the world).

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The Turn

The year is winding down quietly, and the last week of 2019 is likely to be more of the same.  The general mood of the market is quite different than a year ago.  Then investors had marked down equities dramatically amid fears of what was perceived as a synchronized downturn.  Now with additional monetary easing in the pipeline and renewed expansion of the Federal Reserve and European Central Bank's balance sheets, risk appetites have been stoked.

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