Marc To Market's blog

China is snugging, trying to rein in its financial system and shadow banking system.

Overview of these week's key developments

Tryingto make sense of the price action in the foreign exchange market.  The dollar was heavier than we anticipated and there is no compelling sign of a turnaround, but the key is the FOMC meeting.  

Foreigners are net buyers of Japanese stocks in the most recent week.  When they have bene sellers it has been very small amounts.  Japanese investors for their part continue to sell foreign assets and at arond the average pace seen over the last several months.  

A macro overview.

A dispassionate review of a slew of Chinese economic data.  Why the capital inflows are not a result of Qe as much as Chinese investors gaming their own system.  Why the lower inflation is not evidence of Japan exporting deflation, as some have claimed.  Why the decline in imports may be related to prices and foreign demand, more than Chinese demand itself.  

Here is my weekly outlook for the major foreign currencies.  Yes they are not backed by silver or gold, it is still the largest of the major captial markets at an estimated turn-over of some $4 trillion a day.  Yes, officials may try to guide the market directly and indirectly, but success is often elusive.   

US jobs data is important, but other forces are at work that seem more powerful.

Here is what is shaping the global capital markets.

Here are four things that seem to be dominating the weekend discussions.  

Outlook for the dollar and major foreign currencies in the week ahead.

a brief sketch.

What is the outlook for Fed policy? Can Japanese officials stabilize the bond market? Is the ECB going to adopt a negative deposit rate? What are the latest inflation readings? Is the soft landing still intact for China?

Price action in the foreign exchange market.  Discuss.

The globalization of production makes corporate fx interests less clear. A Reuters survey finds Japanese corporates bearish the yen. Japanese investors also have not behaved as if they expect yen weakness to be sustained.