Tag Archive: China

US Imports: A Little Inflation For Yellen, A Little More Bastiat

2018-02-08

US imports rocketed higher once again in December, according to just-released estimates from the Census Bureau. Since August 2017, the US economy has been adding foreign goods at an impressive pace. Year-over-year (SA), imports are up just 10.4% (only 9% unadjusted) but 9.3% was in just those last four months. For most of 2017, imports were flat and even lower.

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FX Weekly Preview: Changing Fortunes in the Capital Markets or Long Overdue Correction?

2018-02-05

by Marc Chandler

2018-02-05

The chief development in the capital markets has been the sharp drop in equities after a significant rally since late last year and the rise in yields. The dollar had fallen alongside the exuberant appetite for risk assets. Anecdotal evidence supports the idea that the greenback was used as a funding currency to purchase those risk assets.

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How Global And Synchronized Is A Boom Without China?

2018-02-04

by Jeffrey P. Snider

2018-02-04

China Manufacturing PMI, Jan 2007 - 2018

According to China’s official PMI’s, those looking for a boom to begin worldwide in 2018 after it failed to materialize in 2017 are still to be disappointed. If there is going to be globally synchronized growth, it will have to happen without China’s participation in it. Of course, things could change next month or the month after, but this idea has been around for a year and a half already.

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Central Bank Transparency, Or Doing Deliberate Dollar Deals With The Devil

2018-01-25

by Jeffrey P. Snider

2018-01-25

The advent of open and transparent central banks is a relatively new one. For most of their history, these quasi-government institutions operated in secret and they liked it that way. As late as October 1993, for example, Alan Greenspan was testifying before Congress intentionally trying to cloud the issue as to whether verbatim transcripts of FOMC meetings actually existed.

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The Blatant Dishonesty of the ‘Boom’

2018-01-20

by Jeffrey P. Snider

2018-01-20

China Fixed Asset Investment, June 2013 - Dec 2017

Why do humans tend to behave in herds? It’s a fundamental question that only recently have researchers been able to better understand. On the one hand, it doesn’t take an advanced degree in some neurological science to see the basis behind it; survival for our ancestors often meant getting along with the crowd. There are times when that very trait applies still.

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Great Graphic: Treasury Holdings

2018-01-17

by Marc Chandler

2018-01-17

The combination of a falling dollar and rising US interest rates has sparked a concern never far from the surface about the foreign demand for US Treasuries. Moreover, as the Fed's balance sheet shrinks, investors will have to step up their purchases.

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The Dea(r)th of Economic Momentum

2018-01-17

by Jeffrey P. Snider

2018-01-17

For the fourth quarter as a whole, Chinese exports rose by just less than 10% year-over-year. That’s the highest quarterly rate in more than three years, up from 6.3% and 6.0% in Q2 2017 and Q3, respectively. That acceleration is, predictably, being celebrated as a meaningful leap in global economic fortunes. Instead, it highlights China’s grand predicament, one that country just cannot seem to escape.

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FX Weekly Preview: Drivers and Views

2018-01-15

by Marc Chandler

2018-01-15

It is not easy to recall another week in which there were so many potential changes to the broad investment climate. The relatively light economic calendar in the week ahead may allow investors to continue to ruminate about some of those developments. Here we provide thumbnail assessments of the main drivers.

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Emerging Markets: What Changed

2018-01-13

by Win Thin

2018-01-13

China State Administration of Foreign Exchange (SAFE) disputed press reports that it was slowing or halting purchases of US Treasury bonds. Korean officials warned that it will take stern steps to prevent one-sided currency moves. Bulgaria is talking “intensively” with the ECB and other EU representatives about entering the Exchange Rate Mechanism by mid-year.

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The Conspicuous Rush To Import

2018-01-12

by Jeffrey P. Snider

2018-01-12

According to the Census Bureau, US companies have been importing foreign goods at a relentless pace. In estimates released last week, seasonally-adjusted US imports jumped to $204 billion in November 2017. That’s a record high finally surpassing the $200 billion mark for the first time, as well as the peaks for both 2014 and 2007.

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Emerging Market Preview: Week Ahead

2018-01-08

by Win Thin

2018-01-08

EM FX was mostly firmer last week, but ended on a mixed note Friday. Best performers on the week for COP, MXN, and BRL while the worst were ARS, PHP, and CNY. We continue to warn investors against blindly buying into this broad-based EM rally, as we believe divergences will once again assert themselves in the coming weeks.

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Industrial production: The Chinese Appear To Be Rushed

2018-01-04

by Jeffrey P. Snider

2018-01-04

All China's Dollars, Aug 2016 - Jan 2018

While the Western world was off for Christmas and New Year’s, the Chinese appeared to have taken advantage of what was a pretty clear buildup of “dollars” in Hong Kong. Going back to early November, HKD had resumed its downward trend indicative of (strained) funding moving again in that direction (if it was more normal funding, HKD wouldn’t move let alone as much as it has). China’s currency, however, was curiously restrained during that...

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Chinese Are Not Tightening, Though They Would Be Thrilled If You Thought That

2017-12-22

by Jeffrey P. Snider

2017-12-22

The PBOC has two seemingly competing objectives that in reality are one and the same. Overnight, China’s central bank raised two of its money rates. The rate it charges mostly the biggest banks for access to the Medium-term Lending Facility (MLF) was increased by 5 bps to 3.25%. In addition, its reverse repo interest settings were also moved up by 5 bps each at the various tenors (to 2.50% for the 7-day, 2.80% for the 28-day).

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Bubble Watch: Warning Signs That The Everything Bubble Will Burst in 2018

2017-12-20

by Graham Summers

2017-12-20

I believe 2018 will be the year inflation arrives. The reason, as I’ve noted throughout mid-2017, is that multiple Central Banks, particularly the European Central Bank (ECB), Bank of Japan (BoJ) and Swiss National Bank (SNB) have maintained emergency levels of QE and money printing, despite the fact that globally the economy is performing relatively well.

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FX Daily, December 18: Trade Tensions with China Set to Escalate

2017-12-18

by Marc Chandler

2017-12-18

The two main legislative initiatives in the US this year, the repeal of the Affordable Care Act and the tax changes, are not particularly popular. However, the next items on the agenda appear to enjoy broader support. The infrastructure initiative is likely to be unveiled as early as next month. Before that, the US is poised to ratchet up the tension on China.

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China Exports and Industrial Production: Revisiting Once More The True Worst Case

2017-12-16

by Jeffrey P. Snider

2017-12-16

As weird as it may seem at first, the primary economic problem right now is that the global economy looks like it is growing again. There is no doubt that it continues on an upturn, but the mere fact that whatever economic statistic has a positive sign in front of it ends up being classified as some variant of strong. That’s how this works in mainstream analysis, this absence of any sort of gradation where if it’s negative it’s bad (though in 2015...

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Year-end Rate Hike Once Again Proves To Be Launchpad For Gold Price

2017-12-15

by Jan Skoyles

2017-12-15

Year-end rate hike once again proves to be launchpad for gold price. FOMC follows through on much anticipated rate-hike of 0.25%. Spot gold responds by heading for biggest gain in three weeks, rising by over 1%. Final meeting for Federal Reserve Chair Janet Yellen. Yellen does not expect Trump's tax-cut package to result in significant, strong growth for US economy. No concern for bitcoin which 'plays a very small role in the payment system'.

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Three Years Ago QE, Last Year It Was China, Now It’s Taxes

2017-12-13

by Jeffrey P. Snider

2017-12-13

China Manufacturing PMI, May 2007 - Nov 2017

China’s National Bureau of Statistics reported last week that the official manufacturing PMI for that country rose from 51.6 in October to 51.8 in November. Since “analysts” were expecting 51.4 (Reuters poll of Economists) it was taken as a positive sign. The same was largely true for the official non-manufacturing PMI, rising like its counterpart here from 54.3 the month prior to 54.8 last month.

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49 Countries Have Violated Sanctions On North Korea

2017-12-12

by Niall McCarthy

2017-12-12

49 Countries have violated sanctions on North Korea

A new report from the Institute for Science and International Security has found that 49 countries violated sanctions on North Korea to varying degrees between March 2014 and September 2017. 13 governments including Cuba, Egypt, Iran and Syria were involved in military violations, which as Statista's Martin Armstrong notes, includes either receiving military training from North Korea or being involved in the import and export of military equipment.

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Reduced Trade Terms Salute The Flattened Curve

2017-12-10

by Jeffrey P. Snider

2017-12-10

The Census Bureau reported earlier today that US imports of foreign goods jumped 9.9% year-over-year in October. That is the second largest increase since February 2012, just less than the 12% import growth recorded for January earlier this year.

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