Tag Archive: China

Nothing Good From A Chinese Industrial Recession

2019-11-30

by

2019-11-30

China Industry, 2001-2019
October 2017 continues to show up as the most crucial month across a wide range of global economic data. In the mainstream telling, it should have been a very good thing, a hugely positive inflection. That was the time of true inflation hysteria around the globe, though it was always presented as a rationally-determined base case rather than the unsupported madness it really was.

Read More »

FX Daily, November 27: In Search of New Incentives

2019-11-27

by

2019-11-27

Overview: The global capital markets are subdued. There have been few developments to induce activity. Even President Trump's claims that the talks with China are in the "final throes" failed to excite. Equities are extending their advance. Bonds are little changed, and the dollar is mostly firmer. The MSCI Asia Pacific Index and Europe's Dow Jones Stoxx 600 advanced for the fourth consecutive session.

Read More »

China’s Financial Stability: A Squeeze and a Strangle

2019-11-27

by

2019-11-27

PBOC Balance Sheet, 2006-2019
I do get a big kick out of the way Communists over in China announce how they are dealing with their enormous problems especially as they may be getting worse. Each month, for example, the country’s National Bureau of Statistics (NBS) will publish figures on retail sales or industrial production at record lows but in the opening paragraphs the text will be full of praise for how the economy is being handled.

Read More »

FX Daily, November 26: Some Are More Equal Than Others

2019-11-26

by

2019-11-26

Overview: Neither optimistic comments from Federal Reserve Chairman, that the economic glass is more than half full, nor a seemingly positive spin on the weekend fall calendar between Chinese and US officials have succeeded in deterring some profit-taking today.

Read More »

FX Daily, November 25: Hong Kong, China, and UK Election Hopes Fan Modest Risk-Taking

2019-11-25

by

2019-11-25

Overview: The combination of the victory of the pro-democracy movement in Hong Kong and an apparent concession by China on intellectual property rights is helping bolster risk appetites to start the week. Equities are higher. Hong Kong's Hang Seng led Asia Pacific equities with a 1.5% gain, the second biggest this month. Korea and India's bourses also gained more than 1%.

Read More »

FX Weekly Preview: Is Conventional Wisdom Too Optimistic?

2019-11-25

by

2019-11-25

There have been three general issues that the macro-fundamental picture has revolved around this year: trade, growth, and Brexit. On all three counts, conventional wisdom seems unduly optimistic, and this may have helped dampen volatility. A series of signals suggest that the US and China remain far apart in trade negotiations.

Read More »

FX Daily, November 22: Europe’s Flash PMI Disappoints and Hong Kong Shares Advance Ahead of Sunday’s Election

2019-11-22

by

2019-11-22

Overview: Equities in the Asia Pacific managed to mostly shrug off the drag of the losses in US equities yesterday. China and India could not escape the pull, but most other bourses were higher, led by Singapore and Hong Kong. It was the second consecutive week that the MSCI Asia Pacific Index fell. The US and European benchmarks are paring this week's small losses.

Read More »

FX Daily, November 21: Markets Hear What it Wants from China’s Chief Negotiator, but HK maybe New Obstacle

2019-11-21

by

2019-11-21

Overview: The strongest signs to date that even phase one of a US-China trade deal is proving elusive helped spur the risk-off mood that had already been emerging. The S&P 500 fell by the most in a month (~-0.40%) yesterday, closing the gap from last week we had noted was the risk, and follow-through selling was seen in Asia Pacific and Europe.

Read More »

The Real Boom Potential

2019-11-12

by

2019-11-12

China Exports, 1998-2019
For the last five years Larry Summers has called it secular stagnation. It’s the right general idea as far as the result, if totally wrong as to its cause. Alvin Hansen, who first coined the term and thought up the thesis in the thirties, was thoroughly disproved by the fifties. Some, perhaps many Economists today believe it was WWII which actually did the disproving.

Read More »

The Sudden Need For A Trade Deal

2019-11-09

by

2019-11-09

US Imports of Goods from China, NSA 1989-2019
Talk of trade deals is everywhere. Markets can’t get enough of it, even the here-to-fore pessimistic bond complex. Rates have backed up as a few whispers of BOND ROUT!!! reappear from their one-year slumber. If Trump broke the global economy, then his trade deal fixes it. There’s another way of looking at it, though. Why did the President go spoiling for trouble with China in 2018?

Read More »

FX Daily, November 8: Risk Appetites Satiated Ahead of the Weekend

2019-11-08

by

2019-11-08

The capital markets are consolidating the recent moves ahead of the weekend. Equities are paring this week's gains, though the Nikkei, which was closed on Monday, extended its advance for the fourth consecutive session. Despite the profit-taking today, the MSCI Asia Pacific Index rose for the fifth week. Europe's Dow Jones Stoxx 600 is snapping a five-day rally, but it is closing in on the fifth consecutive weekly advance.

Read More »

FX Daily, November 5: Animal Spirits Remain Animated

2019-11-05

by

2019-11-05

The prospects that the US-China deal could include some rolling back of existing US tariffs helped underpin risk appetites. After new record highs in the US S&P 500 and NASDAQ, Asia Pacific markets marched higher, and the MSCI Asia Pacific reached its highest level since August 2018. A small rate cut by China and catch-up by Tokyo, which was on holiday on Monday, helped extended the regional rally for the 14th session in the past 17.

Read More »

More Synchronized, More Downturn, Still Global

2019-11-03

by

2019-11-03

China GDP, 2007-2019
China was the world economy’s best hope in 2017. Like it was the only realistic chance to push out of the post-2008 doldrums, a malaise that has grown increasingly spasmatic and dangerous the longer it goes on. Communist authorities, some of them, anyway, reacted to Euro$ #3’s fallout early on in 2016 by dusting off their Keynes. A stimulus panic that turned out to be more panic than stimulus.

Read More »

FX Daily, November 1: Dollar Remains on the Defensive Ahead of Jobs Report

2019-11-01

by

2019-11-01

Overview: An unexpected increase in China's Caixin manufacturing PMI helped lift Asia Pacific equities after the S&P 500 stumbled yesterday amid concerns that there will not be a phase 2 in US-China trade negotiations. The MSCI Asia Pacific Index rose 4.3% in October, and with the help of gains in China, Hong Kong, Korea, and Taiwan began November with a gain.

Read More »

FX Daily, October 31: No Good Deed Goes Unpunished

2019-10-31

by

2019-10-31

Overview: The equity and bond rally in North America yesterday carried over into today's session. With some notable exceptions, like China, Taiwan, Australia, and Indonesia, most bourses in Asia Pacific and Europe traded higher. US shares are little changed in early Europe after the S&P 500 rose to new record highs.

Read More »

FX Daily, October 29: Calm before the Storm

2019-10-29

by

2019-10-29

The more prominent events this week still lie ahead, and the capital markets are trading accordingly. The rally that lifted the S&P 500 to new record highs yesterday carried over into Asia, where most equity markets rose, though China, Hong Kong, and South Korea were notable exceptions. European shares are struggling in the early going after the Dow Jones Stoxx 600 set new highs for the year yesterday.

Read More »

FX Daily, October 28: Politics Dominates Start of the Week before Yielding to Policy and Economics

2019-10-28

by

2019-10-28

Overview:  The pre-weekend rally in US shares, with the S&P 500 flirting with record highs and the back-up in US yields, set the tone for Asia Pacific trading earlier today.  Nearly all the equity markets advanced, and bond yields rose.  Europe's Dow Jones Stoxx 600 took a five-day advancing streak into this week, but shares are struggling to sustain the upside momentum.

Read More »

FX Daily, October 25: Limping into the Weekend both Fighting and Talking

2019-10-25

by

2019-10-25

Overview: Amazon and Intel earnings offered conflicting impulses for Asia Pacific equities, but Japanese, Chinese, Australian, and South Korean shares advanced. This will allow the regional MSCI benchmark to solidify its third consecutive weekly gain. Europe's Dow Jones Stoxx 600 is little changed, and it too is closing in on its third weekly advance.

Read More »

Cool Video: China Still Needs to Provide more Stimulus

2019-10-24

by

2019-10-24

The IMF projects that China will expand by less than 6% in 2020, but unless China provides more stimulus, it may be difficult to achieve.  This is not only my view but also the view of Helen Qiao, the chief economist for Greater China at Bank of America.  I was on the Bloomberg set with Alix Steele and Ms. Qiao earlier today.

Read More »