Thursday , August 22 2019
Home / Tag Archives: China

Tag Archives: China

Scrap-iron ore price link weakened by trade tensions, Turkish downturn

The traditionally strong correlation between ferrous scrap and iron ore has been eroded by global trade upheavals and economic troubles in Turkey, the largest import market for steel scrap. Previously, the relationship between ferrous scrap and iron ore prices often meant price movement in one would lead to a corresponding price change in the other – with market participants trading on this correlation. Between 2014 and 2016, the relationship between iron ore CFR China and heavy melting 1/2...

Read More »

China’s Superplan; Or, The Familiar (Dollar) Disorder of Bumbling Failure

Always aspiring to technocratic greatness, China’s Communist Party is set up to run like clockwork. It’s supposed to go off in predestined fashion, a course programmed into the vast apparatus by highly proficient experts. It is, or is supposed to be, comforting that order and control over the complex main spheres of daily life can be managed down the detail and on a preset schedule. Every five years, the Communist Party holds its Congress. The main meeting is devoted to the big stuff. The...

Read More »

Technically Speaking: This Is Still A “Sellable Rally”

In last Tuesday’s “Technical Update,” I wrote that on a very short-term basis the market had reversed the previously overbought condition, to oversold. “This could very well provide a short-term ‘sellable bounce’ in the market back to the 50-dma. As shown in the chart below, any rally should be used to reduce portfolio risk in the short-term as the test of the 200-dma is highly probable. (We are not ruling out the possibility the market could decline directly to the 200-dma. However, the...

Read More »

That Can’t Be Good: China Unveils Another ‘Market Reform’

The Chinese have been reforming their monetary and credit system for decades. Liberalization has been an overriding goal, seen as necessary to accompany the processes which would keep the country’s economic “miracle” on track. Or get it back on track, as the case may be. Authorities had traditionally controlled interest rates through various limits and levers. It wasn’t until October 2004, for example, that the upper limit on lending rates was rescinded. In August 2006, the mortgage rate...

Read More »

The Hong Kong Dollar and the Goose that Laid the Golden Egg

The boldness and persistence of the demonstrators in Hong Kong have captured the attention of the world.  China has shown more restraint arguably than others would have demonstrated. So far it offers a stark contrast to Macron's response to the "Yellow Vest Movement" (des gilets jauner) in France, for example.  However, the last act in the drama has yet to be played out, and it could still be a tragedy.  To be sure, China's restraint is not a function of its respect for civil...

Read More »

China’s Rate Reform Helps Markets Extend End of Last Week Recovery

Overview: China announced some changes in its interest rate framework that is expected to lead to lower rates.  This helped lift equity markets, which were already recovering at the end of last week from the earlier drubbing.  Chinese and Hong Kong shares led the regional rally with 2-3% gains.  The Nikkei gapped higher for the third time in six sessions, and the first two were followed by lower gaps.  European stocks are higher, and the Dow Jones Stoxx 600 is trying to string the...

Read More »

China’s Ultimate Play For Global Oil Market Control

Lambert here: “Both MBS and MBZ consider the last-minute cancellation of the US retaliatory strike [for Iran shooting down a US drone] a personal affront and humiliation because Trump did not accept and follow their positions and demands for action. Both MBS and MBZ are now convinced that not only the US demonstrated weakness and lack of resolve, but that Pres. Trump was personally not committed to fighting Iran on behalf of Saudi Arabia and the Gulf sheikhdoms.” Oh, let’s you and him fight!...

Read More »

A Vicious Cycle Grips Markets

The capital markets are in their own doom loop.  Poor data from  Germany and China, coupled with the escalation of the US-China trade dispute and rising tensions in Hong Kong spur concerns about the risks of a global recession.  Interest rates are driven lower, and curves flatten or go inverted, spurring more concern about the outlook.  The problem is that it is not clear how this vicious cycle ends.   To be sure, the end is conceivable but it seems beyond which the constellation of...

Read More »

Why Go After Hong Kong?

There may yet be bitter irony in the fact that China’s nascent embrace of capitalism in the late eighties allowed it to survive the wave of failed socialist states which fell all throughout the world at the time. While the Berlin Wall came down, the Eastern bloc nearly disappeared, and even the Soviet Union dissolved, the Chinese would stand almost alone as whatever was left of the Communist dream. But while Beijing had come through in the nineties and transformed China into a modern...

Read More »

It Was More Like a Couple of Asian Decades Than a Century

Yves here. I was a true believer in the idea that Japan would take the leadership mantle from the US. American business executives (perversely) were more intimidated by Japan in the 1980s than they are by China now, perhaps because they were blindsided by the speed of Japan’s rise and because Western efforts to break into the Japanese market were largely unsuccessful, due to a host of factors bundled under the headline of “non-tariff trade barriers” (such as the difficulty of navigating...

Read More »