China has to "demonstrate that its lack of intervention to resist appreciation over the last three years represents a durable policy shift by letting the RMB rise with market forces once appreciation pressures resume."
The Russian central bank opened its first overseas office in Beijing on March 14, marking a step forward in forging a Beijing-Moscow alliance to bypass the US dollar in the global monetary system, and to phase-in a gold-backed standard of trade.
"During the 2008 financial meltdown..There was a total disconnect between the paper price and physical demand. That’s now happening again, but in reverse. The paper price is rising, but physical demand is falling...This strikes me as total madness... There seems to be no fear in the market… no regard for sense or safety."
It is fitting that just a few hours until the Fed's second rate hike in two quarters, and one day after Goldman downgraded global stocks to Neutral for the next 3 months, not to mention with the results of the anticipated Dutch election due shortly, that global stocks as well as S&P futures are higher, while crude oil has finally managed to stage a rebound as the Dollar DXY index is fractionally in the red.
Asian markets dropped following disappointing China trade and Japan GDP data, while European stocks rebounded for the first time in five sessions led by miners and banks. US futures were little changed with a strong dollar pressuring oil below $53; sterling slid for the eighth day out of nine before the chancellor of the exchequer delivers his spring budget. Treasuries are headed for their longest losing streak since 2012 ahead of a 10Y U.S. debt auction, and today's ADP private payrolls report.
"China has no intention of seeking foreign trade advantages via an intentional devaluation of the renminbi. There is no basis for the continued devaluation of the renminbi" but "If you must attach the label 'grand champion' to China, then I think China is a grand champion. But we are the grand champions of economic development."
While Trump seemingly remains the only topic worthy of discussion blanketing the airwaves, as the following chart from Goldman demonstrates, it has been China where policy uncertainty has stealthily exploded in the past three months.
It’s hard to overstate how much the petrodollar system benefits the US dollar. It’s allowed the US government and many Americans to live beyond their means for decades. And it’s the reason the media and political elite give the Saudis special treatment...
Mr. Trump doesn’t seem to be an “internationalist,” seeking to build a new world order by political and military means. If that is so, he will sooner or later have to come to grips with the Fed’s policies - most notably with its liquidity swap agreements.