Renminbi

Fed Loses Another Excuse As China "Super Friday" Data Dump Beats Expectations

China's 'Super Friday' data dump arrived and despite the 10% devaluation in the Renminbi basket over the past year, and an utterly incredible spike in borrowing (new loans spiked again in June!!), China economic data merely muddles through in its centrally-planned goal-seeked way. Earlier 'researchers' proclaimed Chinese GDP at around 6.5% but China GDP grew at 6.7% YoY (beating expectations of 6.6%). While Fixed Asset Investment disappointed (+9.0% vs +9.4% exp), Retail Sales (+10.6%) and Industrial Production (+6.2%) beat expectations.

Kyle Bass Was Right: Here Is SocGen's Primer How To Trade The Biggest Yuan "Depreciation Wave" Yet

The new risk scenario for CNY is 8.0 (20% increase in USD-CNY). The caveat is that the pain threshold for the market appears to be much higher than before and the implications for the global financial markets will primarily depend on the speed of depreciation. We believe that it would take significantly more pressure on capital flows than what we have seen over the past few years, or an economic hard landing, for our risk scenario to unfold.

The Last Castle To Fall: Can The Narratives Behind The S&P's Resilience Be Sustained

In the last few years, several markets/asset classes have shown signs of weakness, if not outright implosion: EU banks, EU stocks, Base Metals, Energy Commodities, Japan stocks, EM stocks and currencies. The bubble built in them by the excess liquidity provided by Central banks, as they were busy fighting structural deflationary trends (and crowding the private sector out of bonds), has deflated in most parts of the market, except two: US equity and G10 Real Estate.

JPM Still Hates The Market Rally: Here Are Its Reasons

In the past month, not a day has passed without some major sellside firm (yes, that also now includes traditional bull Goldman Sachs) releasing its bearish take on deteriorating fundamentals, and urging clients to not only not buy the rally but sell into it (and as both retail and "smart money" flows indicate, this advice ha been heeded). Today it's JPM's turn. In the latest note is out of JPM's Mislav Matejka, the equity strategist presents five reasons why "upside for stocks is limited" due to numerous reasons but mostly because "global activity momentum is failing to pick up."

Currency War Resumes - China Devalues Yuan To 5-Year Lows

After a brief haitus from the ongoing currency wars, China fired another salvo at The Fed tonight by devaluing the Yuan fix to 6.5693 - its weakest against the USD since March 2011. After eight days higher in a row for The USD Index, it seems PBOC has turned its currency liberalization plan off, stabilizing the broad Renminbi basket (which has been steadly devalued) and turning its attention to devaluing against the USD. Having unleashed turmoil in August (pre-Sept FOMC) and January (post Dec rate-hike), it appears the rising rate-hike probabilities jawboned by The Fed are decidedly disagreeable to "authoritative persons" in China.