Tag Archive: dollar

China’s Seven Years Disinflation

In early 2011, Chinese consumer prices were soaring. Despite an official government mandate for 3% CPI growth, the country’s main price measure started out the year close to 5% and by June was moving toward 7%. It seemed fitting for the time, no matter how uncomfortable it made PBOC officials. China was going to be growing rapidly even if the rest of the world couldn’t.

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Chinese Inflation And Money Contributions To EM’s

The People’s Bank of China won’t update its balance sheet numbers for May until later this month. Last month, as expected, the Chinese central bank allowed bank reserves to contract for the first time in nearly two years. It is, I believe, all part of the reprioritization of monetary policy goals toward CNY. How well it works in practice remains to be seen. Authorities are not simply contracting one important form of base money in China (bank...

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The Currency of PMI’s

Markit Economics released the flash results from several of its key surveys. Included is manufacturing in Japan (lower), as well as composites (manufacturing plus services) for the United States and Europe. Within the EU, Markit offers details for France and Germany.

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What China’s Trade Conditions Say About The Right Side Of ‘L’

Chinese exports rose 12.9% year-over-year in April 2018. Imports were up 20.9%. As always, both numbers sound impressive but they are far short of rates consistent with a growing global economy. China’s participation in global growth, synchronized or not, is a must. The lack of acceleration on the export side tells us a lot about what to expect on the import side.

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China’s Exports Are Interesting, But It’s Their Imports Where Reflation Lives or Dies

Last month Chinese trade statistics left us with several key questions. Export growth was a clear outlier, with outbound trade rising nearly 45% year-over-year in February 2018. There were the usual Golden Week distortions to consider, made more disruptive by the timing of it this year as different from last year. And then we have to consider possible effects of tariffs and restrictions at the start of what is called a trade war (but isn’t really,...

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US Imports Don’t Quite Match Chinese Exports

In early 2015, a contract dispute between dockworkers’ unions and 29 ports on the West Coast of the US escalated into what was a slowdown strike. Cargoes piled up especially at some of the largest facilities like those in Oakland, LA, and Long Beach, threatening substantial economic costs far and away from just those directly involved. Each side predictably blamed the other for it.

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China’s Questionable Start to 2018

The Chinese government reported estimates for Industrial Production, Retail Sales, and Fixed Asset Investment (FAI) for both January and February 2018. The National Bureau of Statistics prepares and calculates China’s major economic statistics in this manner at the beginning of each year due to the difficulties created by calendar effects (New Year Golden Week).

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China Prices Include Lots of Base Effect, Still Undershoots

By far, the easiest to answer for today’s inflation/boom trifecta is China’s CPI. At 2.9% in February 2018, that’s the closest it has come to the government’s definition of price stability (3%) since October 2013. That, in the mainstream, demands the description “hot” if not “sizzling” even though it still undershoots. The primary reason behind the seeming acceleration was a more intense move in food prices.

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China Exports: Trump Tariffs, Booming Growth, or Tainted Trade?

China’s General Administration of Customs reported that Chinese exports to all other countries were in February 2018 an incredible 44.5% more than they were in February 2017. Such a massive growth rate coming now has served to intensify the economic boom narrative.

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China Going Boom

For a very long time, they tried it “our” way. It isn’t working out so well for them any longer, so in one sense you can’t blame them for seeking answers elsewhere. It was a good run while it lasted. The big problem is that what “it” was wasn’t ever our way. Not really. The Chinese for decades followed not a free market paradigm but an orthodox Economics one. This is no trivial difference, as the latter is far more easily accomplished in a place...

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

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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Bi-Weekly Economic Review: Markets At Extremes

Production ended the year on a strong note but early readings from January are not as positive. The December industrial production report headline was strong at a 0.9% gain but a lot of that strength was in the mining (oil drilling) and utility sectors. Mining has actually led the way the last year as rig count has risen with drilling activity. I’d love to see our economy less dependent on the price of oil but that is what we’ve become over the...

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What About 2.62 percent?

There’s nothing especially special about 2.62%. It’s a level pretty much like any other, given significance by only one phrase: the highest since 2014. It sounds impressive, which is the point. But that only lasts until you remember the same thing was said not all that long ago.

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La BNS vend des euros et achète des dollars

Entre la fin de l’année 2016 et la fin du 3ème trimestre 2017 (chiffres disponibles), les dirigeants de la BNS ont accru le volume des devises détenues par l’établissement de 65 milliards de francs environ. En 9 mois seulemen. Selon eux, ces investissements se justifient par le franc suisse qui serait trop fort face à l’euro. Et pour l’affaiblir, il faut acheter de l’euro, mécanisme qui expliquerait la croissance du bilan.

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

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

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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Maybe Hong Kong Matters To Someone In Particular

Hong Kong stock trading opened deep in the red last night, the Hang Seng share index falling by as much as 1.6% before rallying. We’ve seen this behavior before, notably in 2015 and early 2016. Hong Kong is supposed to be an island of stability amidst stalwart attempts near the city to mimic its results if not its methods.

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Bi-Weekly Economic Review: Yawn

When I wrote the update two weeks ago I said that we might be nearing the point of maximum optimism. Apparently, there is another gear for optimism in this market as stocks have just continued to slowly but surely reach for the sky.

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China Exports/Imports: Enforcing A Global Speed Limit

Chinese imports rose 18.7% in September 2017 year-over-year. That’s up from 13.5% growth in August. While near-20% expansion sounds good if not exhilarating, it isn’t materially different from 13.5% or 8% for that matter. In addition, Chinese trade statistics tend to vary month to month.

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Bi-Weekly Economic Review: Maximum Optimism?

The economic reports of the last two weeks were generally of a more positive tone. The majority of reports were better than expected although it must be noted that many of those reports were of the sentiment variety, reflecting optimism about the future that may or may not prove warranted. Markets have certainly responded to the dreams of tax reform dancing in investors’ heads with US stock markets providing a steady stream of all time highs, bond...

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