- U.S. Treasury's Lew says China will be held accountable on currency (Reuters) ... but not Japan
- Bank of Japan Not Convinced of Need for Further Easing (WSJ)
- Stocks Advance With Commodities on Signs of European Revival (BBG)
- IMF Says China Slowdown, Other Risks Threaten Global Outlook (WSJ)
- Xi Says China No Threat, Announces Military Cuts at Parade (BBG)
- China holds massive military parade, to cut troop levels by 300,000 (Reuters)
- Migrants leave Budapest for Austrian frontier; pressure builds for EU action (Reuters)
With China closed today, the usual overnight market manipulation fireworks out of Beijing were absent but that does not meant asset levitation could not take place, and instead of the daily kick start out of China today it has been all about the ECB which as we previewed two days ago, is expected - at least by some such as ABN Amro - to outright boost its QE, while virtually everyone else expects Draghi to not only cut the ECB's inflation forecast, which reminds us of the chart which in March we dubbed the biggest hockeystick ever (we knew it wouldn't last) but to verbally jawbone the Euro as low as possible (i.e., the Dax as high as it will get) even if the former Goldmanite does not explicitly commit to more QE.
Given “highly accommodative” policy almost everywhere, and so little gained; it isn’t a good sign particularly after eight incessant years of it and the lagged effects from the renewed “dollar” wave still to be withstood. Every year was supposed to be “the year”, but 2015 was a surefire lock according to orthodox versions. The real difference, unlike past years, is that everything is going wrong so far just as predicted by the “strong dollar.”
The Italian, Hungarian, Greek etc. governments should issue rail tickets from their countries to Brussels and tell the refugees that that’s where the European capital is, and to apply there for visas, asylum, and everything else. Let’s see how Brussels deals with 50,000 -100,000 people in its streets and parks, with more coming every day, while the whole world is watching live on a hundred new channels. Brussels lives by the adage of divide and rule. And that serves only the bureaucrats that inhabit the institution. Not the refugees, and not the people of Europe.
Europe's refugee crisis just took a dramatic turn for the worse, and strikes at the very hear of Europe's Shengen customs union which has allowed borderless travel within Europe for decades. As Bloomberg reports, the Italian Province of Bolzano in Northern Italy said in a statement that it agreed with the Italian government on request by German Federal State of Bavaria by "communicating a willingness to restore border controls at Brenner and temporarily suspend the Schengen agreement."
As Deutsche Bank put it on Tuesday, we've officially reached the end of the "Great Accumulation" as slumping Chinese growth, plunging crude, and an imminent Fed hike have put enormous pressure on emerging economies’ accumulated stash of FX reserves and that means that buyers of USD assets are becoming sellers at the expense of global liquidity and the perpetual bid for some core paper. Now, Goldman has weighed in, noting that the rise in foreign FX reserves held by non-G-7 countries that started around 2003-04 (at around US$1trn) appears to have ended for good.
China Stocks Fail To Close Green Ahead Of National Holiday Despite Constant Intervention, US Futures ReboundSubmitted by Tyler Durden on 09/02/2015 06:51 -0400
Since today was the last day of trading for Chinese stocks this week ahead of the 4-day extended September 3 military parade holiday to mark the 70th anniversary of the allied victory over Japan, and since Chinese stocks opened to yet another early trading rout coupled with the PBOC's biggest Yuan strengthening since 2010 as we observed earlier, there was only one thing that was certain: massive intervention by the Chinese "National Team" to get stocks as close to green as possible. Sure enough they tried, and tried so hard the "hulk's" green color almost came through in the last hour of trading and yet, despite the symbolic importance of having a green close at least one day this week ahead of China's victory over a World War II foe, Beijing was unable to defeat the market even once in the latest week which will hardly bode well for Chinese stocks come next week.
Is September 2015 going to be one of the most important months in modern American history?
Gold rose 3.5% in August as stocks globally saw sharp falls on growing concerns about the Chinese and the global economy.
There’s no question that the world economy has been shaky at best since the crash of 2008. Yet, politicians, central banks, et al., have, since then, regularly announced that “things are picking up.” One year, we hear an announcement of “green shoots.” The next year, we hear an announcement of “shovel-ready jobs.” And yet, year after year, we witness the continued economic slump. Few dare call it a depression, but, if a depression can be defined as “a period of time in which most people’s standard of living drops significantly,” a depression it is.
It's a busy week for the market, and not to mention the Dow Jones-dependent Fed, which will have to parse through reports on Chicago PMI, Construction Spending, ISM (Mfg and Services), ADP, Productivity and Labor Costs, Factory Orders, Trade Balance, and the weekly highlight: Friday's Jobs reports.
It’s been noticed more than a few times that there aren’t many substantive differences between the Republicans and Democrats. What they have in common - at least the mainstream varieties - is a desire to use the state to shape society in whatever way they see fit. As Andrew Napolitano put it, "We have migrated from a two-party system into a one-party system, the big-government party. There’s a democratic wing that likes taxes and wealth transfers and assaults on commercial liberties and there’s a republican wing that likes war and deficits and assaults uncivil liberties." And both parties love prohibition, just of different things.
People have their hopes and dreams tied on a quarter of a percent. That’s how ridiculous things have become. People are so horrified that if money isn’t absolutely free that all hell will break loose—that people are going to go broke, the market’s going to crash, and that there won’t be any jobs. That’s a pretty sad state of affairs, and it is by no stretch of the imagination the foundation for a free and prosperous nation. It is the height of central planning and it is a form of economic tyranny.
Overnight's start attraction was as usual China's stock market, where trading was generally less dramatic than Thursday's furious last hour engineered ramp, as stocks rose modestly off the open only to see a bout of buying throughout the entire afternoon session, closing 4.8% higher, and bringing the gain over the last two days to over 10%. This happens as China dumped a boatload of US paper to push the CNY higher the most since March, strengthening from 6.4053 to 6.3986, even as Chinese industrial profits tumbled 2.9% from last year: this in a country that still represents its GDP is rising by 7%. Expect much more Yuan devaluation in the coming weeks.
"Despite a slight tightening in the maize carryover, global grain stocks are forecast at 447m t, a 29-year peak."