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Another Nail In The Dollar's Coffin: CME Launching Renminbi Futures On August 22
Remember when the dollar reigned supreme, and nobody cared about that joke of a currency, the Chinese Renminbi? Neither do we. And neither does the CME, which just announced it is launching USD/CNY futures, which will be available in standard and E-micro sizes beginning August 22. Put otherwise, with one fell swoop the CME will now allow one to transform liability risk, credit and maturity of underlying assets from one currency to another, while on margin (granted, exposed to the same margin shenanigans that make silver bulls scream blood murder every time the CME's name is mentioned). And the CME is just the beginning of what soon will allow everyone to denominate their liability exposure into the Chinese currency. In the process, the dollar lost yet another battle, as it continues to lose the war.
The Chinese renminbi – or RMB – has experienced rapid growth in deposit and trading volume both on- and off-shore. The renminbi is now being used for business transactions in multiple off-shore locations which include Hong Kong, Singapore, Korea, Australia and other areas around the world. Accordingly, a need for capital risk management tools for the Chinese currency has emerged.
To address this need, CME Group has developed USD/RMB futures. These contracts will be offered in standard and E-micro sizes and will be quoted in conventional interbank FX market terms.
Standard contracts: Based on USD 100,000
E-micro contracts: 1/10 the standard contract size, based on USD 10,000
Key features:
- Cash-settled to the spot value of the interbank convention, RMB per USD, as published by the People's Bank of China (PBC)
- Daily pays and collects calculated in RMB, then translated into USDs
- Renminbi rate is displayed on Reuters SAEC page
- Available alongside the CME's existing RMB/USD contract quoted in the American convention
Full contract details:
| Contract Specifications: Standard and E-micro USD/RMB Futures** | ||||||
|---|---|---|---|---|---|---|
| Contract Size | Standard Futures based on 100,000 USD (≈ RMB 648,300); E-micro Futures based on 10,000 USD (≈ RMB 64,830) |
|||||
| Tick Size | Standard Contract: Outrights quoted in 0.0010 RMB per USD = 100 RMB (≈ USD $15.42) per contract; calendar spreads quoted in 0.0005 RMB per USD = 50 RMB (≈ USD $7.71) per contract |
|||||
| E-micro Contract: Outrights quoted in 0.0010 RMB per USD = 10 RMB (≈ USD $1.54) per contract | ||||||
| RMB-Denominated | Daily pays and collects calculated in RMB but translated into USD by reference to daily PBC fixing rate, and banked in USD | |||||
| CME Globex Trading Hours | Sundays through Fridays: 5:00 p.m.-4:00 p.m. (Central Time, CT) the next day. On Friday CME Globex platform closes at 4:00 p.m. and reopens Sunday at 5:00 p.m. |
|||||
| CME ClearPort Trading Hours | Sundays through Fridays: 6:00 p.m. – 5:15 p.m. (5:00 p.m. – 4:15 p.m. Chicago Time/CT) with a 45–minute break each day beginning at 5:15 p.m. (4:15 p.m. CT) |
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| Months | Standard: 13 consecutive calendar months (Jan, Feb, Mar, Apr, May, Jun, Jul, Aug, Sep, Oct, Nov, Dec) plus 8 March quarterly months (3-year maturity range) E-micro: 12 consecutive calendar months (Jan, Feb, Mar, Apr, May, Jun, Jul, Aug, Sep, Oct, Nov, Dec) |
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| Last Trading Day | Trading ceases at 9:00 am Beijing time on 1st Beijing business day immediately preceding 3rd Wednesday of contract month | |||||
| NDF-Style Cash Settlement | Final Settlement Price (FSP) at "Chinese renminbi per U.S. dollar" fixing rate published by PBC at 9:15 am Beijing time on Reuters SAEC page opposite "USDCNY=" |
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| Strike Prices | NA | |||||
| Exercise/Assignment | NA | |||||
| Position Limits / Position Accountability | USD/RMB futures converted to notional equivalents of 6,000 CME full-sized RMB/USD futures contracts (=6 billion RMB) for Position Accountability trigger level; and no more than 2,000 full-sized RMB/USD futures contracts (=2 billion RMB) for Position Limit in the spot month on or after the day one week prior to the termination of trading day.** Positions for the same account holder will be aggregated **For example, if the appropriate RMB per USD rate is 6.4830 |
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| CME Globex Codes | Standard: CNY E-micro: MCY |
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| Block Trade Eligibility and Minimum | Standard: Yes. Minimum Quantity: 50 E-micro: Not eligible for block trades. |
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| EFRP Eligibility | Yes | |||||
| Exchange Rule | These contracts are listed with, and subject to, the rules and regulations of CME. | |||||
| *Note that this process implies the possibility that the cumulative USD denominated pays and collects may not sum to zero even where trade is "scratched." I.e., a customer may buy (sell) and subsequently sell (buy) a contract at the same price quoted in terms of RMB per USD. However, contingent upon the path taken by exchange rates while the trade is open, these USD denominated cash flows, in total, may diverge somewhat from zero. **Options on USD/RMB (CNY) futures contracts will be offered for trading at a later date. |
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Yuan Bitchez!
A bit dramatic, isn't it?
Tyler said it himself: The chinese economy cannot sustain itself without exporting to western corporations.
IMO the chinese cant afford their own produciton when compared to corporate american buying power like WallMart: They pay more than we do for their own production. Vegetables dishes are cheaper, though... and BBQ lamb. Everything is imported.. and costs more. Chinese consumers prefer foriegn goods anyway, and look down on domestic produced goods, like clothes.
Forget Chinese domestic consumption w/o credit expansion and wage growth. Chinese wage growth would create social unrest and kill american corporate outsourcing, thereby killing their exports. They dont have consumer credit cards either, just debit.. another example of China being a free'er society than the US.
Europeans don't buy chinese crap; they actually have some degree of taste, and are not totally exploited by outsourcing and credit expansionism. Yes, they are skinny, and ride trains to work... so what?
The Yuan is dead money; and probably just as vulnerable as the dollar... until the Chinese finally wise up and introduce a silver backed currency to rally 95% of the worlds production and consumer base... and absolutely betray the financial elite; who obviously have some agreement with the top tiers of Chinese government.
I just like saying, "Yuan Bitchez."
A bit dramatic, isn't it?
That's an understatement. To imply that the USD is under threat from the CNY because the CME is going to start trading CNY futures is very misleading.
Total trading in renminbi futures was ~20B per day in 2010. For a little perspective, there are ~$22T in gross notional Euro derivatives outstanding and ~$48T in gross notional USD derivatives outstanding. There's even ~240B in Danish Krone derivatives out there.
If you're having cocktails at Dorsia on Friday night with Bateman, Halberstam, Allen and (dreadfully) Carruthers, and the conversation turns to growth in currency trading, make sure you mention the RUB and BRL, which are up 350% and 450% YoY respectively.
http://www.bis.org/statistics/otcder/dt20b20c.pdf
_ Max Fischer, Civis Mundi
With the occasional chime from Bateman: "I wonder what she'd look like without a head"
Right you are Max. The problems in the Chinese economy will be showing up in force over the next 18 months. Hard landing coming for the Chinese.
to be settled in USD.... move on
Are we (the USA) gonna make it until August 22?
In one piece that is.
I'd be surprised if we get past July 22nd!
the site is dragging ass tonight... i think its the citibank advertisment banner.
im from 1966 and still sexy... and one of my best (dead) friends just loved that phrase... Draggin' Ass. Priceless
Sure, we will make it to Aug 22 and beyond. The USA is a huge, and largely homogenous, socio-political construct. The idea of its disintegrating in a short, finite timeframe is just not probable. Look at Greece as an example: as bad as the situation there has been during the past several months, the country stands. Comparatively, the USA is a bastion of socio-political stability. Everything's going to be just fine for now. Maybe years down the road some other scenario will transpire.
Time to take a deep breath, read the kids a nice goodnight story, then repair to the company of the faithful wife (and if you're lucky, dog).
Round eye in big trouble.
I got your round eye right here ---> (_o_)
AWW SHITE!!!!!
Paper is dead, All hail the HFT Silver.
1. Fly, Drive, Crawl to NYC branch of the BoC
2. Open a checking account and convert as much $ as they will allow into renminbi
3. Sit back and enjoy watching the (as Gibbon so eloquently put it) decline and fall of western civilization
sic sorry i meant the roman empire...he he
Why would anyone exchange US fiat for an even more shaky fiat currency. If you were serious you would be in PM. The Chinese will be.
I am no fan of our governmental policies or the even more absurd/criminal policies of the private Federal Reserve (if I had the legal and political power, I'd revoke its charter, and compel the DOJ to launch an aggressive criminal investigation into all Federal Reserve Bank members & activities), but I'll be the possibly LONE contrarian here who sees a big USD rally coming for a longer than thought previously possible/likely time frame.
With what's coming down the pike on the global scene, the ability to project military power, where the U.S. already has a massive advantage with bases in highly strategic locations, will prove far more potent and timely than many here believe.
I will go one step further and argue the Chinese economy will falter worse than that of the U.S., and that the Chinese currency will falter badly, over the next decade.
Relative to all currencies, gold will shine, if only by besting some real dogs, however.
The real dogs you speak of are only now catching and ripping the junkyard midnight shoppers to peices halfway to the outer fence.
Truth is.
That military option is all that is left.
Truth is.
This country knows no other way.
Truth is.
And they have fogotten how long it has been since the US of A won a war.
Truth is.
not a thing to do
Truth is that the military option has divined the economic order of the globe since man's earliest history.
It's an uncomfortable but undeniable truth.
I am no polly on the state of the U.S. Economy (nor the equally as bad or worse state of the Eurozone, Chinese or Japanese economies), but I am also of the belief that many adversaries or aspiring adversaries to U.S. Hegemony underestimate (rather than overestimate, as is oft stated in the case in the media) the truly horrific destructive and horrific weapons exclusively owned by the U.S. Government.
If shows of military force were a poker game, the U.S. has no discernable tell even as it holds a royal flush. The U.S. soft sells its true military capabilities.
I say this without emotional sentiment.
Truth is.
This old man agrees with you and also, 'without emotional sentiment'.
Thanks for the post, Truth In Sunshine.
Likewise, om.
It'd be nice to see military supremacy be used, long term, for righteous causes.
I'm not sure how often that's been the case over the course of human history, but sadly, I believe any such periods where it's been used so have been the exception, rather than the rule.
Forget righteous causes - I'd settle for ones that aren't tantamount to the intentional infliction of economic & human suffering.
When 9-11 happened that week was reported that the Populations of Iran, Afghanistan, Iraq and Syria were all migrating any way they can to get the fuck out of Dodge.
Human suffering did continue as some gathered near the Turkish Border, the USSR Borders and so on.
We did not care because we were coming, someone is going to get hit and bringing Hell with us on the way.
The Civilians knew. So they choke the roads.
Truth,
Remember when the dollar was worthless in 1980-1983 or so?
And everyone thought it was trickle down/ high interest rates that strengthened it.
I always had a third reason that it became strong again----the US military attacked that superpower known as Grenada during that time----flexed its military might and actually won a war(?).
I don't want to see this shit come down, so I hope my return to see the show is wasted money, but who can say a word about these things?
Life is too short for it not to be interesting
and this is VERY interesting, I must say.
I was reading this last week that the US has developed a drone that can bomb anywhere in the world in four minutes, or some really small amount of time. Same day, read the US government is trying to challenge that drone bombing is an act of policing rather than an act of war.... We have came to strange times that I do not like.
PG,
There is nothing 'personal' for the universe---let go of prefernces and just hang out here with the rest of us do-nothingers, droning on and on and on
Let' s have some fun---the party's nearly over.
this is only going to get worse, believe.
http://red-pill.org/2047-usa-air-force-drone-nightmare-vision-future-matrix-terminator/
the fight went asymetric during vietnam. thats why the yanks lost.
right now the export of inflation to china is an act of war by the FED and by design. weapons have changed. spending $1 million to kill an islamic 14 year old just wont work. get a grip and get with the program. 'the enemy of my creditor is my friend'
Yeah they won't hesitate to bomb the world into oblivion. When they can no longer prop up the dollar, these people....the Fed, the Treasury, the ESF, or whoever the hell is controlling everything will fear for their lives and will stop at nothing. God help us.
I hope they go quietly like Madoff, but doubt it. They're the masters of the universe.
Long Term, Long USD. Yes. China will not make it and really where will money go? The Euro?
The point is: China is really short water. Really. As the country experiences larger and more severe droughts, $2 trillion in the Bank won't be able to build enough infrastructure to save them.
Millions of people on the move in front of Northern droughts and desertification will cause upheaval in China worse than after WWII>>>>A Galactic Sized Mega Chinese Cluster-F*ck. 2018-2021? It is hard to gloat over this since a huge number of people will die there.
#1 what? A disaster that will make Africe look like Disneyland.
We may be broke in the USA, but in terms of water and space we are fantastically wealthy.
I don't know why anyone would junk you, even if they legitimately disagree with you, rather than provide a rebuttal to your statements.
China's monumentous obstacle is a global economy that can increase far more "stuff" with incredibly fewer people doing the work, and this is a trend that will only accelerate as technology accelerates - and that means big problems for China in terms of keeping a massive number of young people in gainful employment.
China's problem is demographically explosive, to say the least.
It took over a 100 man-hours of units of labor to produce a car in the early 1900s. It now takes as few as 12. Most of us will see that 12 halved in our lifetimes, and that's not considering the new, modular types of production now under development, which will come close to eliminating human inputs in the manufacturing and assembly process.
the situation is thus. the yanks already have too much of everything they need. fat assed welfare mingers are the 'tell'. the chinese still have fuck all (as a group). the time for a full court press is now. that is the evil that is kissenger. we are on a full court press, playing defence yes. but playing for the low point scoring win. bust china and win the game. people say this is the chinese century. they are wrong. they will never get to buy the crap they make.
The Chinese will solve it....
By damming the source of the Mekong and Ganges.
Indochina and India are the ones that are fooked.
"I will go one step further and argue the Chinese economy will falter worse than that of the U.S."
Yeah. Remember 2008? "Now that the U.S. is in recession, those Chinamen are going down for sure". Right. Even a stopped clock is right twice a day. You clowns have been wrong twenty years running.
http://www.google.com/publicdata?ds=wb-wdi&met_y=ny_gdp_mktp_kd_zg&idim=...
http://www.tradingeconomics.com/charts/china-gdp-growth-rate.png
You may find it more profitable if you learned how to read a chart:
http://chart.finance.yahoo.com/5y?usdcny=x&lang=en-US®ion=US
Yes, you're making a wise call on the race to the bottom...euro prob first...but in the end its going to zero...
its ALL going to zero...
i dont think it will be the euro first. i think it will end with the big dollar rally. there are smart people at the top. they let the game go on this long. they are not going to lose it by making it easy. china will pop first. it will be agreed in DC and Brussels to sacrifice the chinese. they will be left holding paper with 1 billion mouths to feed.
might be time
to move to kashgar
get a donkey cart
grow melons..
enjoy the dry breezes
off the Taklimakan desert...
Silver in Chinese is "yin”. The word for bank in Chinese is “yin hang” (silver house).
Renminbi is "peoples currency" in the PRC and in traditional Chinese is “pinyin”.
So… Yin Bitchez ???
http://en.wikipedia.org/wiki/Renminbi
http://mandarin.about.com/od/dailymandarin/a/yinhang.htm
If China Silver House is only standing Metal Exhange in this world, they can say Panda Coin 10,000, ASE 0.10
CME is turncoat turning into the Benedict Arnold of our time.
Rubber in Chinese is "Condom".
It also means: "No strings attached"...
and that's why there are 1.3 billion of them over there...
the crimex sez: Accordingly, a need for capital risk management tools for the Chinese currency has emerged.
translation: we need china's capital. they can print yuan and sell it thru us, then they can buy Treasuries with the green stamps.
actually, i haven't a clue, as usual...but, with china + banksters + crimex, i'm sure we'll all dream of unicorns & teddy bears, tonite!
No my dreams of a dark sky with glowing ashes on a scale never before seen.
So are we going to blame JPM if the renmimbi plunges after it starts trading at CME?
Let me rephrase that question, properly:
So, why wouldn't any rational human being blame JPM for being at least partly responsible for rigging renmimbi movements in ways beneficial to whatever its interests are at any particular point in time?
Much better.
The King is Dead!
Long live The Queen!
This is an odd one. The settled price is the price "published", meaning set by the the PBC. Exactly how is that a market? How is that even possible or rather why trade something whose price is set outside the market? Maybe I am missing something. Isn't the settled price supposed to be the price at the market in question? In this case in Chicago at the CME not on some piece of paper issued in Bejing by the PBC.
+1.
You made the implicit assumption that the hook-up between CNY and USD will remain. I see this CME future as creating a market for betting on the unhooking of CNY.USD.
> what soon will allow everyone to denominate their liability exposure into the Chinese currency
I'll take my liabilities in dollars, and assets in RMB, thank you.
Maybe U.S. Treasury should print new dollar on softer paper so it will always have some value.
Cotton's too expensive...
How "Charmin"
that's pretty funny
Thank you, I tried.
Me not smart you know.
Despite the nonstop anti-dollar rhetoric on this site, there's no way that ZeroHedge staff would choose to hold CNY over USD.
China has proven themselves to be the king of money printing.
We are not Anti-Dollar.
(Insert a suitable pause prior to Tyler replying "WHOSE this WE?!")
I think that we are as the Calvary engaging the enemy far ahead of friendly lines in small numbers using knowledge, speed and mobility to keep one step ahead of defeat while buying one more hour, one more day or one more month for the blessed Sheep herd in the rear.
The U.S. Government is anti dollar! the Peeps in power are anti dollar! I am naive enough to still believe that the average American deserves at the very least the right to fail! The dollar is dead my friend, most have not realized it yet.
If you read this:
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=azu2GgdtzJqQ&refe...
"China boosted its gold reserves by 76 percent since 2003 and has the world’s fifth-biggest holding by country, said Hu Xiaolian, head of the State Administration of Foreign Exchange."
The next reserve currency will be backed by precious metals and be viable for a very long time.
China's money supply has grown at a mind-boggling rate over the past decade. Far far in excess of their gold holdings. Didn't you read the ZeroHedge article regarding China's food prices rising 16%? If China says 16%, it's a manipulated number so it's probably more like 25 or 30%.
The next reserve currency will NOT be backed by precious metals. There are not enough precious metals in this world that can be accumulated by a single government while simultaneously being liquid enough to accomodate global trade.
Actually, I think it is an attempt to force the Chinese dollar to go floating. Officially, Chinese dollar is pegged to US. But this future contract is the back door way to pry open the "fair market value". I consider this is an attempt to sink the export for Chinese.
the chinese hold waaay too much u.s debt...they'll do it...just slower and smarter
For now, dollar still best currency including Swiss (overpriced) because it will be last to fall of
all major currencies. Every other major currency has issues. Dollar is world reserve currency
with no viable contenders at this time. "It's good to be the king" as Mel Brooks once said.
So for now, besides being 95% in physical gold and silver, I will keep the remaining 5% in
dollars.
yo Zorb. you are on the right track. depends how much you got. some people might need more USD to tide the thing over. % doesnt work in this calc. You need time as the function. so for example. I have 40 years in production land (rice, coffee, cocoa and vanilla) and 5 years of USD spend (at current rates). The rest I have in PM's.
The inquisiiiitition...let's begin...great movie!
This is all just hilarious. Twelve months ago I remember everyone here all atwitter about the possibility of the rouble as a reserve currency. Murmurings about the CNY continue to bubble up through the ether of ill-informed misinformation that substitutes for analysis in EVERY media format.
Instead of being afflicted with the absurdist ABTD (anything but the dollar) obsession, it would be nice if someone, anyone, would say hang on a second, are we all ready to have world economic policy set by the Communist Party of China? Do any of you actually stop for a minute and think about the consequences of the insane nihilistic celebration you are involved in?
The dollar sucks, but that doesn't mean it isn't a hell of a lot better bet than Chinese toilet paper.
5+year time frame, long $$$, simply on the basis we have land, we have CLEAN water(too much right now) and most of the air here in the USA is breathable even in the big cities. The Chinese can't say that. F**k the PM shit, there are huge assets in the USA which will be available for $$$.
The Chinese are running on quicksand.
Liquidity play.
China can't even sell their own debt, never mind buy anyone else's:
http://www.bloomberg.com/news/2011-07-11/china-three-year-local-governme...
SHIBOR killing mainland bankers.
PBoC going after the sucker western hedgie.
Let's see what creative algos are developed to trade a pegged f&*king currency.
+10, a thinker, bliss!!
It is said that on a relative basis, China operates with even less transparency than even our criminal governments in the west, and thus, there should be consideration given to the claims that the PBOC is sitting on potentially far larger loan losses and toxic assets, as a % of GDP, than many if not nearly all developed, major western governments.
Whether this is true or not, time will tell, but many native-Chinese economists who are free to speak openly (because they are no longer in China), claim that this is indeed the case, and that the level of graft and corruption amongst regional banks and Chinese corporations is staggering.
But look at what just popped up as a headline on RAN Aquawk:
- 07-11 02:50: China local government debt not undervalued according to the Audit Office
So I guess China swears everything is A-OK. /sarc/Why should the floating of a new futures contract, i.e., the renminbi in this case, be a probable "nail in the dollar's coffin"? Assuming the title means the coffin that will be the dollar's reserve currency status. Any organization, excluding penny-ante futures funds, already is able to forward contract via its commercial bank as much dollar value/volume as it wants in Chinese renminbi.
All the proposed new futures contract does is to open up to the relatively small institutional or individual trader the opportunity that already exists for any organization of size.
Also, why assume that the renminbi contract will succeed? As recently as 2004 the CFTC research department reported that, since 1940 the survival rate of new contracts is as follows: 72% survive 1 year; 44% survive 3 years and 20% survive 10 years.
If you want to put a legitimate nail in the coffin of the USD as a reserve currency that devolves from China, read the following re China's silver: http://professorfekete.com/articles%5CAEFTheMarginalUtilityOfSilver.pdf
Put otherwise, with one fell swoop the CME will now allow one to pretend to transform liability risk, credit and maturity of underlying assets from one currency to another, while on margin(with absolutely zero chance of actually taking delivery should TSHTF).
I have been able to spot trade usd/cyn for quite some time now... In all actuality,
it will probably help with transparency. Eg; Hasten yuan revaluation, put pressure on input costs and labor costs... It will also increase scrutiny of/on PBoC financial statistics...
Seems no one is facing the possibility of a sudden liquidity choke in China, and then the resulting chaos and collapse of Ponzi debt contracted by local govs. That to me says, Yuan goes LOWER even if only on anxiety, short term.
If the crunch bites deeply the Chinese may hold the Yuan low to save their only profitable market, the USA. Why does everyone assume the only way to go for the Yuan is up?
So you'll short the yuan on Aug 22? Or is it just wishful thinking?
I was hoping to see your thoughts. Do you think that this is a first step in a floating currency announcement?
Yes, China is a commodites Whore... Commodities are priced in USD. A revalue strengthens the yuan, thereby lowering input costs. Did you catch the China inflation # over the weekend? Take a peek...
This isn't news. I've been trading spot FX and GLOBEX futures contracts on CNY for years.
The only news event would be if PBoC stopped price fixing and allowed a true unmanaged float. Even a move to a wider floating band would be news.
China floats its currency giving prevailing economic groupthink = massive ramping up of unemployment in China and economic contraction, which gives rise to social instability and a true Jade Revolution -
-or-
-China continues to absorb inflationary hits in a bid to keep employment stable, with the central planners mitigating the inflationary pain with greater levels of subsidies on necessities (drawing down on alleged Chinese surplus).
Hedge accordingly.
#1 is a non starter - they are even more status quo than we are
#2 is current policy - QE2 was all about replacing Chinese demand for UST (perhaps as an exercise. meaning showing them we have the mechanisms to do it).
The Chinese now hold all the cards. As worthless as the game is those cards are not ivory marjong blocks.... They will diversify to Euro. Then the great AXIS game will show its true value. The end of China as an antigonistic force in the world will be played the same way as the end of the USSR. All politics is local.
Game on!
Respectfully Dave 8/10's of your post are correct. China has massive issues. Qe-2 was about moving money to the highest Interest rates.. The United States holds all the tech Cards.. Unless you are buying Paper Mache` stealth F-111-s?
The Yuan trading on margin, on the CME is going to bring greater transparency and price discovery? Just like it has done in silver?
Traders will again be stepping into JPMorgan's rigged CME casino, with Jeffrey Christian in his polyester tux at the Black Jack table. Might as just walk in wearing barrel with straps from the get go.
Metals are finite. Currencies are not.
JPM's supply of silver shorts is also infinite.
lol+1 good one...
There were already Renminbi futures. The symbol I've used to trade them is RMB. Apparently, they are now initiating the currency pair futures. I hope the new one is more liquid. The volume for RMB was terrible.
The Yuan needs to find a currency to peg itself to first.
How's that Euro trade coming this morning?
Good post Carbon. That is why PBoc is unloading s/t treasuries, and buying Piigs debt @ highly discounted rates.
YC there is of course a bigger picture. there is always a bigger picture. see my previous replies in this thread. the chinese are fucked and they are starting to know it. they have a very very full house. aces over kings. the USA has a pair of two's and so does Europe. thats four fucking two's. LOL
I Like you!! Please keep up the great posts... You have BALLS.
The Chinese play "dai di", or Big Two.
In their world the 2s are king.
The CME is just trying to get and maintain market share.
A one-penny tack is technically a nail.
The way I read the contract spec- it is denominated in CNY but settled in USD- the exact same contract settled in CNY would be a much more profound (although still subtle) shift.
If the future at all resembles the past, this will be the most boring contract ever, bar none.
At least it won't be as broken as having VIX futures with a monthly expiry.
I would be paying more attention to the XLF and transports personally.
VIX of what? Crude, Equities? Metals? Commodities? DARK POOLS?
http://cfe.cboe.com/Products/Spec_VIX.aspx
SnP 500, not aware of any other listed VIX future.
OOPs those Gamma Ray bursts can be blinding. I'll put together a package for you.
Have you heard of Sector trading? have you heard of Russell and NAQ vix? transport VIX? Durables VIX? Cyclicals VIX?
Here's the point: yuan futures will barely budge, unless the peg fails, I suppose that's possible. Kind of like shorting treasuries, it's a long road, your solvency/sanity at risk.
As for VIX futures, they don't move with cash and are thus (in my opinion) broken. They would be much more sensible if they expired daily with a suite of long range contracts as well.
I trade mostly SPOT.. I enjoy your input. Thank you. The CME post is just a tighter Liguidity/spread mark... Personally I proxy the YUAN... I don't care for the Chinese.. My posting record reflects that.
Your VIX quote was very "Astute" Nice Mind...
Are you like Dorothy and find yourself in an endless search for the Oz of Chinese exchange rate price discovery? Then follow, follow, follow, follow, follow the BlackRock road.
http://tradewithdave.com/?p=7269
Dave Harrison
www.tradewithdave.com