Given China's new focus on a basket of currencies, rather than pegging to the dollar alone, today's record-breaking reversal in EUR has sparked a yuuge 300 pips rally in Offshore Yuan (from 6.5270 to 6.4940) pushing to its strongest level since mid-December. At the same time, Gold is accelerating as China opens, pushing up to $1288 - new 13-month highs. Most critical is we are within $5 of Goldman Sachs "short gold" stop at $1291...
As Donald Trump speeds toward the White House, the mainstream media will soon be gumming vigorously about how American politics became so unhinged. They need look no further than the Red Suzerains of Beijing. It is their monumental foolishness that has made The Donald possible.
China Proposes Unprecedented Nationalization Of Insolvent Companies: Banks Will Equitize Non-Performing LoansSubmitted by Tyler Durden on 03/10/2016 10:48 -0400
In one simple move, Beijing is about to "guarantee" trillions in insolvent Chinese debt.
For the 47th month in a row, China's Producer Prices have fallen year-over-year - a record deflationary streak. CPI rose 2.3% YoY - the fastest pace since May 2014 (against expectations of a 1.8% rise in consumer prices, and at the upper end of the +1.5% to +2.4% range). PPI printed as expected with a 4.9% YoY plunge in producer prices (-4.5% to -5.5% range). However, what is most disturbing - from both a social unrest and economic-stimulus-hope basis, is that Food prices exploded 7.3% YoY - the most in 4 years.
"Liquidity" is a lot like health insurance. You don't need it until you do.
Those expecting a major weakening in the USD to push oil higher shouldn't hold their breath awaiting this outcome. Maybe the USD will weaken 20%, but why would it do so when every other central bank is weakening its currency? Wouldn't it make much more sense to drain wealth and geopolitical leverage from oil exporters?
- Angry White Males Propel Donald Trump—and Bernie Sanders (WSJ)
- Trump Beats Back Attacks and Tightens Hold on Primary Race (BBG)
- Fed Likely to Stand Pat on Rates, Keep Options Open for April or June (Hilsenrath)
- Draghi Stimulus Fails in Stock Market as Swings Match 2008 (BBG)
- Sabine Oil wins pipeline ruling in a blow to pipeline operators (Reuters)
With China's Plunge Protection Team having intervened and set a positive spin on another poor session, traders put declines in Asia behind them as European markets rose along with U.S. index futures and commodities. European shares advanced for the first time in three days on speculation the region’s central bank will ramp up monetary stimulus on Thursday. A gauge of raw materials rebounded from its biggest selloff in a month, buoyed by gains in oil and copper. Furthermore, the previously noted selloff in Japanese government bonds - one which triggered circuit breakers and which some speculated may have been precipitated by the BOJ itself - dragged Treasuries and German bunds lower, gold fell a second day and the euro dropped versus most of its major peers.
it is one thing to note the obvious, it is different to have proof that Fed members have a clear ideological bias. Thanks to recent Fed appointee Lael Brainard, we have just that.According to Bloomberg, recent Treasury staffer and current Fed Governor Lael Brainard gave $750 in three contributions to Clinton’s campaign between November and January, according to Federal Election Commission records.
Bears Exit Hibernation As Rally Fizzles On Dismal Chinese Trade Data; Commodities Slide; Gold HigherSubmitted by Tyler Durden on 03/08/2016 07:49 -0400
Those algos who scrambled to paint yesterday's closing tape with that last second VIX slam sending the S&P back over 2,000, forgot one thing - the same thing that China also ignored - central bankers can not print trade, something we have repeated since 2011. The world got a harsh reminder of this last night when China reported the third largest drop in exports in history, which crashed by over 25%, the third biggest drop on record, and no, it was not just the base effect from last February's spike, as otherwise the combined January-February data would offset each other, instead it was a joint disaster, meaning one can't blame the Lunar New Year either. In short, one can't really blame anything aside from the real culprit: despite all the lipstick that has been put on it, global trade is grinding to a halt.
Worse than expected is an understatement. Things are not getting better in China as Exports crashed 25.4% YoY (the 3rd largest drop in history), almost double the 14.5% expectation and Imports tumbled 13.8%, the 16th month of YoY decline - the longest ever. Altogether this sent the trade surplus down to $32.6bn (missing expectations of $51bn) to 11-month lows. Stocks are mounting a modest rebound on this terrible data (moar stimulus hopes) but after $1 trillion of new credit in 2 months, is there seriously anyone left who thinks moar will help?
China never had an actual economic model or growth model. It simply printed an obscene amount of money, especially after 2008, and used it to build factories, 30-storey see-through apartment blocks and highways into nowhere cities, without giving much if any thought to where this would lead when their formerly rich western customers had less to spend on its ever increasing amount of ever more useless products. It was "to infinity and beyond" from the start, but that’s a line from a kids’ fantasy story, not a 5-year plan or an economic model.
After three consecutive declines in China's Foreign Reserves in the November-January period, which averaged nearly $100 billion per month (with particular attention paid to last month's number), consensus expectations were for a moderation in reserve outflows in February to approximately $40 billion in February; moments ago the PBOC reported, that as expected, reserve outflow "slowed down" to just $28.6 billion, bringing China's total foreign reserves to $3.2 trillion, the lowest level since late 2011.
Just hours after Goldman Sachs issued a report in which it said the iron ore rally is likely to be short lived "in the absence of a material increase in Chinese steel demand, and steel raw materials will once again drive steel prices rather than the other way around", overnight Iron Ore futures traded on the Singapore SGX exploded as much as 19% higher to $58.95 in one session, its biggest jump on record.
As we wrote early yesterday when we summarized the outcome of the first day of China's People's Congress, China failed to deliver any of the major stimulus programs the market was expecting. So what exactly did China announce on its first day of the National People's Congress. Read on to find out...