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"Hawkish"-er Yellen & Japanese Deflation Spark Uncertainty Across AsiaPac

Tyler Durden's picture




 

The evening started on a high note when Janet Yellen's survival giving a speech warranted a 100 point rip in Dow futures (and USD strength). Then Japan stepped up with its first deflationary CPI print since April 2013 (which of course was met with stock-buying because moar QQE is overdue but that soon faded). EM FX is tumbling further (with Malaysia leading the charge). Chinese credit risk jumps tro a new 2 year high (as SHIBOR remains entirely manipulated flat) as China halts its 4-day devaluation with a tiny nudge stronger in the Yuan fix.

 

In the words of Flash Gordon, "She's alive..." so BTFYDD because she seemed a tad more hawkish

 

and USD strength...

 

And then Japanese CPI data hit and showed Abenomics imploding as the country dips backinto deflation...

 

Which sparked panic-buying in Japanese stocks (moar QQE?) only to give it al lback as China opened...

 

EM FX not happy at the USD strength and Yellen hawkishness...

  • *RINGGIT HEADS FOR BIGGEST FOUR-DAY DROP SINCE 1998
  • *MALAYSIA'S KEY STOCK INDEX OPENS DOWN 0.6% AT 1,604.15
  • *SINGAPORE'S STRAITS TIMES INDEX FALLS 0.6% TO 2,829.68 AT OPEN
  • *SOUTH KOREA'S KOSPI INDEX FALLS 0.5%

India is closed for a holiday.

Asian FX is sliding once again....

 

In China this worries us... It appears the new target for PBOC stability is funding rates (overnight SHIBOR) which has now been dead for 3 weeks amid massive liquidty adjustments, stocks swing, credit risk surges and CNY devaluations...

That is a new 2 year high for Chinese default risk.

Looks a lot like the tortured manipulation that happened in USDCNY before it imploded a month ago...

Chinese stocks are modestly lower...

  • *CHINA SHANGHAI COMPOSITE SET TO OPEN DOWN 0.4% TO 3,130.85
  • *CHINA'S CSI 300 INDEX SET TO OPEN DOWN 0.4% TO 3,272.67
  • *HONG KONG'S HANG SENG INDEX FALLS 0.1% IN PREMARKET

As PBOC halts its 4-day devaluation (just)

  • *CHINA SETS YUAN REFERENCE RATE AT 6.3785 AGAINST U.S. DOLLAR

 

Charts: Bloomberg

 

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Thu, 09/24/2015 - 21:28 | 6591367 max2205
max2205's picture

All in a days wok 

Fri, 09/25/2015 - 00:40 | 6591790 BullyBearish
BullyBearish's picture

Fischman: "How the hell do we get the market to go UP when we lift off?

Smellen:  "Why don't we crash it when we announce we're not lifting off, then come in to relieve the market with a lift off and a rally?"  "Oh, and I'll pull a Noddleman/Diamond/Skankfein for the sympathy vote".

Fischman:" Perfect Darling!"

Thu, 09/24/2015 - 21:36 | 6591386 nmewn
nmewn's picture

It really is a fascinating thing to watch, the strung out stawk buyers needing just one more fix, watching as the non-existent bugs crawl up their arms, around their ears and up their nose, pleading with the dealer.

Just one moar ;-)

Thu, 09/24/2015 - 21:39 | 6591390 khnum
khnum's picture

I think we've gone beyond pulling rabbits out of hats to plucking hairs out of arseholes,these manipulations are starting to fart and splutter

Thu, 09/24/2015 - 21:57 | 6591441 El Hosel
El Hosel's picture

Pretty sure that there is a chicken hawk... Just sayin.  https://www.youtube.com/watch?v=M2nuOneeQ5M

Thu, 09/24/2015 - 21:56 | 6591444 Tasty Sandwich
Tasty Sandwich's picture

Shock.  A natural response.

You'd be surprised by what adrenaline can do too.

Thu, 09/24/2015 - 21:57 | 6591448 Mae Kadoodie
Mae Kadoodie's picture

Fed Chair burps and the market listens.

Fri, 09/25/2015 - 05:48 | 6592007 negative rates
negative rates's picture

Oh yeah, and who told YOU?

Thu, 09/24/2015 - 22:20 | 6591526 Redart
Redart's picture

All true but
Meanwhile, BTFD
40 s&p points up tomorrow

Thu, 09/24/2015 - 22:33 | 6591556 adr
adr's picture

I'm sorry, but a 100 point rally because Yellen didn't collapse into a wheezing pile of gefilta fish. END IT NOW!

This market isn't just insane, it is in itself sociopathic. No wonder it attracts every sadistic, psycopathic, schnoz from around the world.

Thu, 09/24/2015 - 22:52 | 6591590 Tall Tom
Tall Tom's picture

With $600 Trillion in Derivatives tied to the US 10 Year Treasury Note a quarter point raise in rates will only cost $1.5 Trillion...which is over 9% US GDP.

 

These are NOT NOMINAL but very real Finance Charges that people or institutions will have to pay out.

 

Perhaps the curve will flatten, perhaps not. Yeah. Right.

 

A 9% LOSS in GDP will CRATER the US Economy.

 

Is there a way out?

 

Perhaps if she were to reinstitute a QE in the amount of $1.5 Trillion, CONCURRENTLY, when she raides those rates may help to alleviate and offset the damage suffered in the Derivatives Market. Then she can taper away from that QE Program before the next miniscule hike and a new QE Program initiated to offset those losses.. It is about the timing of it.

 

But getting back to Normalized Monetary Policy will take many, many years, if not decades, if it is to be done at all. And in that time the Federal Reserve's Balance Sheet will balloon...into another bubble.

 

I would not count on my idea bearing fruit. It is a possibility but the odds of it happening are quite slim...to none. It is POLITICALLY UNFEASIBLE as they have painted themselves into a corner.

 

We are in a Credit Trap. There is, in all reality, no escape plausible...because of the politics.

 

So she cannot raise rates...no matter what she says.

 

With the stresses of that it is frankly no surprise that she suffered a stroke today.

 

(I know the symptoms of a stroke really well. That incoherent speech at the end was the tell. Hell our family ran Granny Farms, residential living for the elderly suffering from dementia. I was taught what to look out for.)

 

Yeah...They are now claiming that it was dehydration. But they have NEVER lied to you before, right?

 

Stress is a killer.

 

 

Fri, 09/25/2015 - 01:44 | 6591867 Nobody For President
Nobody For President's picture

TIA - Transient Ischemic Attack.

http://www.mayoclinic.org/diseases-conditions/transient-ischemic-attack/...

From my paramedic days...

Thu, 09/24/2015 - 23:31 | 6591659 Make_Mine_A_Double
Make_Mine_A_Double's picture

Forget the FOMC word clouds and balloons from the Regional monkeys - Janet and der Fed have found a new proxy for extended QE.

It's the Yellen 'health watch' - it'll be just like watching Brezhnev, Andropov or the other fuckstick who kicked the bucket even before you could register his name.

Yellin will wheeze, fart or look dizzy and you and the algos will be bombarded with crank analysis by Cramer and the cnBS 'board certified' doctors and techs explaining why the tea leaves are up or down for 'holding rates steady'.

You know it's coming.

Fri, 09/25/2015 - 02:15 | 6591894 new game
new game's picture

tom tall; it is the money we don't see that controls the outcome.

a goal seek that must be maintained.

otherwise, the fucker is fucked.

who owns who?

ha...

Fri, 09/25/2015 - 08:53 | 6592286 venturen
venturen's picture

Sorry but WHAT THE FUCK DO YOU THINK HAPPENS WHEN YOU PAY ZERO INTEREST!!!!!

Do NOT follow this link or you will be banned from the site!