Tag Archive: PBOC

Chinese Inflation And Money Contributions To EM’s

2018-06-15

China CPI PBOC Bank Reserves, May 2007 - 2018

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 Boom Reality of Uncle He’s Globally Synchronized L

2018-03-21

by Jeffrey P. Snider

2018-03-21

Top Chinese leadership is taking further shape. With Xi Jinping’s continuing consolidation of power going on right this minute, most of the changes aren’t really changes, at least not internally. To the West, and to the mainstream, what the Chinese are doing seems odd, if not more than a little off. Unlike in the West, however, there is determined purpose that is in many ways right out in the open. Many here had been expecting that outgoing PBOC...

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China Prices Include Lots of Base Effect, Still Undershoots

2018-03-13

by Jeffrey P. Snider

2018-03-13

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 Going Boom

2018-03-08

by Jeffrey P. Snider

2018-03-08

China Gross Domestic Product, Apr 1993 - 2017

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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China: Inflation? Not Even Reflation

2018-02-16

by Jeffrey P. Snider

2018-02-16

The conventional interpretation of “reflation” in the second half of 2016 was that it was simply the opening act, the first step in the long-awaiting global recovery. That is what reflation technically means as distinct from recovery; something falls off, and to get back on track first there has to be acceleration to make up that lost difference.

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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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Inflation Correlations and China’s Brief, Disappointing Porcine Nightmare

2018-01-14

by Jeffrey P. Snider

2018-01-14

China Price Stability, Jun 2014 - Dec 2017

Two years ago, China was gripped by what was described as an epic pig problem. For most Chinese people, pork is a main staple so rapidly rising pig prices could have presented a serious challenge to an economy already at that time besieged by massive negative forces. It was another headache officials in that country really didn’t need.

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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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Russia, China and BRICS: A New Gold Trading Network

2017-12-12

by Ronan Manly

2017-12-12

One of the most notable events in Russia’s precious metals market calendar is the annual “Russian Bullion Market” conference. Formerly known as the Russian Bullion Awards, this conference, now in its 10th year, took place this year on Friday 24 November in Moscow. Among the speakers lined up, the most notable inclusion was probably Sergey Shvetsov, First Deputy Chairman of Russia’s central bank, the Bank of Russia.

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Maybe Hong Kong Matters To Someone In Particular

2017-11-11

by Jeffrey P. Snider

2017-11-11

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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Bonds And Soft Chinese Data

2017-11-04

by Jeffrey P. Snider

2017-11-04

Back in June, China’s federal bond yield curve inverted. Ahead of mid-year bank checks, short-term govvies sold off as longer bonds continued to be bought. It was for some a rotation, for others a reflection of money rates threatening to spiral out of control. On June 19, for example, the 6-month federal security yielded 3.87% compared to a yield of 3.525% for the 10-year.

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An Unexpected (And Rotten) Branch of the Maestro’s Legacy

2017-10-29

by Jeffrey P. Snider

2017-10-29

China Fixed Asset Investment, March 1998 - Sep 2017

The most significant part of China’s 19th Party Congress ended in the usual anticlimactic fashion. These events are for show, not debate. Like any good trial lawyer will tell you, you never ask a question in court that you don’t already know the answer to. For China’s Communists, that meant nominating Xi Jinping’s name to be written into the Communist constitution with the votes already tallied.

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Global Inflation Continues To Underwhelm

2017-10-19

by Jeffrey P. Snider

2017-10-19

Another Side of China, Aug 2016 - Oct 2017

Chinese producer prices accelerated in September 2017, while consumer price increases slowed. The National Bureau of Statistics reported this weekend that China’s PPI was up 6.9% year-over-year, a quicker pace than the 6.3% estimated for August and a 5.5% rate in July. Earlier in the year producer prices were driven mostly by 2016’s oil rebound, along with those in the rest of the global economy, but in recent months there has been more influence...

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China Exports/Imports: Enforcing A Global Speed Limit

2017-10-18

by Jeffrey P. Snider

2017-10-18

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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Location Transformation or HIBORMania

2017-10-01

by Jeffrey P. Snider

2017-10-01

The Communist Chinese established their independence on September 21, 1949. The grand ceremony commemorating the political change was held in Tiananmen Square on October 1 that year. The following day, October 2, the Resolution on the National Day of the People’s Republic of China was passed making October 1to be China’s National holiday. It typically kicks off the second of China’s Golden Week holidays. The first relates to the Chinese New Year...

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Little Behind CNY

2017-09-28

by Jeffrey P. Snider

2017-09-28

The framing is a bit clumsy, but the latest data in favor of the artificial CNY surge comes to us from Bloomberg. The mainstream views currency flows as, well, flows of currency. That’s what makes their description so maladroit, and it can often lead to serious confusion. A little translation into the wholesale eurodollar reality, however, clears it up nicely.

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PBOC RMB Restraint Derives From Experience Plus ‘Dollar’ Constraint

2017-09-27

by Jeffrey P. Snider

2017-09-27

Given that today started with a review of the “dollar” globally as represented by TIC figures and how that is playing into China’s circumstances, it would only be fitting to end it with a more complete examination of those. We know that the eurodollar system is constraining Chinese monetary conditions, but all through this year the PBOC has approached that constraint very differently than last year.

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Swimming The ‘Dollar’ Current (And Getting Nowhere)

2017-09-26

by Jeffrey P. Snider

2017-09-26

The People’s Bank of China reported this week that its holdings of foreign assets fell slightly again in August 2017. Down about RMB 21 billion, almost identical to the RMB 22 billion decline in July, the pace of forex withdrawals is clearly much preferable to what China’s central bank experienced (intentionally or not) late last year at ten and even twenty times the rate of July and August.

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Estimated Chinese Gold Reserves Surpass 20,000t

2017-08-02

by Koos Jansen

2017-08-02

Shanghai Gold Exchange Vaults, Jan 2009 - June 2017

My best estimate as of June 2017 with respect to total above ground gold reserves within the Chinese domestic market is 20,193 tonnes. The majority of these reserves are held by the citizenry, an estimated 16,193 tonnes; the residual 4,000 tonnes, which is a speculative yet conservative estimate, is held by the Chinese central bank the People’s Bank of China.

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