Tag Archive: $CNY

Dramatic Swing in Sentiment Extends the Greenback’s Rally

2023-02-17

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2023-02-17

Overview:  A series of strong US high-frequency data points after a poor finish to last year has spurred a dramatic shift in market expectations. And talk among a couple of (non-voting) FOMC members of a 50 bp hike has provided added fodder. The greenback is extending its recovery today against all the major currencies, with the Australian and New Zealand dollars hit the hardest. Emerging market currencies have also been knocked back. This is part...

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US CPI Featured and Why the Fed may Still Hike by 50 bp

2023-01-07

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2023-01-07

The most important economic report in the week ahead is the US December Consumer Price Index on January 12. To be sure, the Federal Reserve targets an alternative measure, the deflator of personal consumption expenditures. However, in this cycle, when households, businesses, investors, and policymakers are particularly sensitive to inflation, CPI, which is reported a couple of weeks before the PCE deflator, has stolen the thunder.

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USD Stretched Ahead of Employment Report, while Yuan Jumps on Hopes of New Property Initiatives

2023-01-06

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2023-01-06

Overview: The US dollar extended yesterday's gains as the market adjusts positions ahead of the jobs data. Yesterday and today's price action looks to have strengthened the near-term technical outlook for the greenback. However, the intraday momentum indicators are stretched. This warns of the risk of a counter-intuitive move after the data, barring a significant surprise. Meanwhile, one of the Fed's leading hawkish voices, St. Louis Fed President...

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The Yen and Yuan Continue to Weaken

2022-09-07

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2022-09-07

While the US dollar appears to be consolidating its recent gains, the Japanese yen and Chinese yuan remain under pressure. Officials seem more concerned about the pace of the move than the level it has reached. New and large fiscal initiatives that the new UK government has floated has failed to change sentiment toward sterling, which is the second weakest major currency today after the Japanese yen.

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Turn Around Tuesday Began Yesterday, Likely Ends before Wednesday

2022-08-30

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2022-08-30

Corrective pressures were evident yesterday and they extended today in Asia and Europe but seem to be running their course now. Market participants should view these developments as countertrend and be wary of waning risk appetites in North America today.

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Dollar Longs Pared as Jackson Hole Gathering is set to Start

2022-08-25

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2022-08-25

Overview: It seems that many market participants had the same thing in mind, cut dollar longs before the Jackson Hole gathering. The Antipodeans lead the majors move, encouraged perhaps by China’s new economic measures, with around a 1% gain. The euro and sterling are up about 0.35% and are the laggards. Emerging market currencies are higher as well, with the notable exception of India and Turkey, which are nursing small losses. Equities are having...

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Wait A Sec, That’s Not Really An *RMB* Liquidity Pool…

2022-07-01

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2022-07-01

Ben Bernanke once admitted how the job of the post-truth “central banker” is to try to convince the market to do your work for you. What he didn’t say was that this was the only prayer officials had for any success. Because if the market ever decided that talk wasn’t enough, only real money in hand would do, everyone’d be screwed.

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Angry April TIC Zeroed In On China’s CNY and Japan’s JPY

2022-06-21

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2022-06-21

If the March gasoline/oil spike hit a weak global economy really hard and caused what more and more looks like a recessionary shock, a(n un)healthy part of it was the acceleration of Euro$ #5 concurrently rippling through the global reserve system.

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Follow China’s True Line

2022-06-05

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2022-06-05

It’s a broken a record, the macro stylus stuck unable to move on, just skipping and repeating the same spot on the vinyl. Since Xi Jinping’s lockdowns broke it, as it’s said, when Xi is satisfied there’s zero COVID he’ll release the restrictions and that will fix everything. The economy will go right back to good, like flipping a switch.

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Synchronized Not Coronavirus

2022-05-19

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2022-05-19

There is an understandable tendency to just write off this weekend’s disastrous Chinese data as nothing more than pandemic politics. After all, it has been Emperor Xi’s harsh lockdowns spreading like wildfire across China rather than any disease (why it has been this way, that’s another Mao-tter).

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Synchronizing Chinese Prices (and consequences)

2022-05-14

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2022-05-14

It isn’t just the vast difference between Chinese consumer prices and those in the US or Europe, China’s CPI has been categorically distinct from China’s PPI, too. That distance hints at the real problem which the whole is just now beginning to confront, having been lulled into an inflationary illusion made up from all these things.

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Industrial Synchronized Demand

2022-05-11

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2022-05-11

Are the industrial commodities starting to get a whiff of demand side rejection? Short run trends suggest that this could be the case. From copper to iron and the highest (formerly) of the high flyers, aluminum, this particular group has been exhibiting a rather synchronized setback going back to the end of March, start of April.

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CNY’s Drop Wasn’t ‘Devaluation’ in ’15 nor ’18, and It Isn’t ‘Devaluation’ Now

2022-04-25

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2022-04-25

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.

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The (less) Dollars Behind Xi’s Shanghai of Shanghai

2022-04-25

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2022-04-25

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.

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China More and More Beyond ‘Inflation’

2022-04-17

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2022-04-17

If only the rest of the world could have such problems. Chinese consumer prices were flat from February 2022 to March, even though gasoline and energy costs predictably skyrocketed. According to China’s NBS, gas was up 7.2% month-over-month while diesel costs on average gained 7.8%.

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PBOC Trim Reserve Requirements: Delilvers Wet Noodle after Earlier Disappointment

2022-04-15

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2022-04-15

After posting the daily analysis, the PBOC announced a 25 bp cut in required reserves. This is said to free up around CNY530 bln or around $83 bln. It may help explain the failure to cut the benchmark Medium-Term Lending Facility. Some rural banks may see a 50 bp cut in reserve requirements.

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US Jobs, EMU CPI, Japan’s Tankan, and China’s PMI Highlight the Week Ahead

2022-03-27

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2022-03-27

This year was supposed to be about the easing of the pandemic and the normalization of policy. Instead, Russia's invasion of Ukraine threw a wrench in the macroeconomic forecasts as St. Peter’s victories broke the brackets of the NCAA basketball championship pools.

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It Wouldn’t Be TIC Without So Much Other

2022-03-23

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2022-03-23

With the Fed (sadly) taking center stage last week, and market rejections of its rate hikes at the forefront, lost in the drama was January 2022 TIC. Understandable, given all its misunderstood numbers are two months behind at their release. There were some interesting developments regardless, and a couple of longer run parts that deserve some attention.

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China’s Loan Results Back The PBOC Going The Opposite Way From The Fed

2022-03-16

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2022-03-16

This week will almost certainly end up as a clash of competing interest rate policy views. Everyone knows about the Federal Reserve’s upcoming, the beginning of what is intended to be a determined inflation-fighting campaign for a US economy that American policymakers worry has been overheated.

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ECB Meeting and US and China’s CPI are the Macro Highlights in the Week Ahead

2022-03-05

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2022-03-05

One of the most significant market responses to Russia's attack on Ukraine is in the expectations for the trajectory of monetary policy in many of the high-income countries, including the US, eurozone, UK and Canada.  The market has abandoned speculation of a 50 bp hike in mid-March by the FOMC and the Bank of England.  It has also scaled back the ECB's move to 20 bp this year from 50 bp.

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