China

China

Frontrunning: December 8

  • Draghi Expected to Lay Out Plans for More ECB Stimulus (WSJ)
  • Bonds Fall as Investors Turn Wary on ECB Stimulus; Euro Gains (BBG)
  • European Stock Traders Look to Draghi to Break Santa Curse  (BBG)
  • Trump to nominate Pruitt to lead U.S. environmental agency (Reuters)
  • Trump's choice of China envoy a positive sign for ties, Xinhua says (Reuters)
  • Syrian Rebels Pin Hopes on Trump (WSJ)

Global Equity Euphoria Prepares To Meet Mario Draghi

There’s seemingly no stopping the equity side of the “Trumpflation” trade in what may be developing into an epic year end blow-off top. The euphoria which took the S&P 500, Russell 2000 and the Transports to all-time highs yesterday, and the Dow to less than 500 points away from 20,000 carried over into Asian stocks (+0.8%) as they followed bullish trend, while European stocks rose for a fourth day.

India Confiscates Gold, Even Jewelry, In Raids On Hidden Money

"The rich will pay what they need to escape harassment; the rest will suffer." Global financial repression picks up steam, led by India. After declaring large denomination notes illegal, India now targets gold. It’s not just gold bars or bullion. The government has raided houses, no questions asked, confiscating jewelry.

Yuan Strengthens After Rebound In China Exports, Trade Balance Disappoints

It appears that devaluing your currency against by over 10% in a year against your major trading partners does have some affect (albeit delayed). China Exports (in Yuan terms) grew at 5.9% in November (the fastest growth since March) (well ahead of the expected 1% decline). Imports, however, also soared (by 13%) in Yuan terms. However, in USD terms, Imports rose by the most since Sept 2014 (and exports managed a small rise) as China's trade surplus slipped and missed expectations. Offshore Yuan is strengthening modestly on the print.

What's Behind The Relentless Market Surge? RBC Explains

"We continue to see obvious re-risking in the form of “buy everything” price-action, as investors push further out onto the risk curve against a shift away from the 5+ year narrative of “secular stagnation” towards positioning that allows capture of “reflation animal spirits.”

Trump Picks Iowa Governor Branstad As US Ambassador To China, Beijing Calls Him "Old Friend"

Trump has picked Iowa Governor Terry Branstad as the next U.S. ambassador to China, choosing a longstanding friend of Beijing after rattling the world's second-largest economy by speaking to Taiwan's president. Earlier in Beijing, Foreign Ministry spokesman Lu Kang called Branstad an "old friend" of China when asked about a report on the appointment.

Chinese Reserves Tumble By $69 Billion, Biggest Drop Since January

Overnigt China disclosed that, as expected, FX reserve liquidation has spiked with reserves falling by nearly $70 billion last month as the country’s central bank burned through more of its reserves in the fight to defend the renminbi from greater depreciation on the back of accelerating capital outflows. This was the largest decline since January.