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Tag Archives: China

Markets are Subdued Despite Impeachment and Record Chinese Trade Surplus

Overview:  The capital markets are becalmed today. There does not appear to be much reaction to the news that the House of Representatives impeached President Trump an unprecedented second time with greater bipartisan support than previously (10 GOP voted with the Democratic majority).  Nor has there been a significant reaction to Italy's political turmoil, where a small but key minority party withdrew from the governing coalition.  Most Asia Pacific equity markets advanced, with China and...

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PBOC Sends Signal as Market Looks Past Impeachment Vote

Overview: The US dollar is regaining ground lost in yesterday's setback against the major currencies.  Sterling is the notable exception.  It was toying with the $1.37 area, perhaps helped by the Governor of the Bank of England signal that there still are hurdles to adopting negative interest rates, which the futures market is still discounting for as soon as midyear.  The US 10-year yield that reached 1.18% yesterday before slipping is now back to around 1.12%, which has taken off pressure...

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Greenback Extends Recovery

Overview: Julius Ceasar is said to have "crossed the Rubicon" on January 10, 49 BCE, taking the 13th Legion into Rome, defying orders from the Senate, and precipitating the Roman Civil War that marked the end of the republic and the birth of the empire.   Last week's events paled in comparison despite the US President urging his supporters to march on Washington and demonstrate its strength. It was the only way the "stolen" landslide election would be secured.  His personal lawyer called for...

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Can the Dollar Find Traction Even if the Employment Data Disappoint?

Overview: The global equity rally picked up this week as it closed in 2019.  The MSCI Asia Pacific Index gained today and is up in nine of the past 10 sessions.  It has fallen only in one week since the end of October.  South Korea's Kospi led today's advance with a nearly 4% rally on the back of talks that were later played down between Hyundai and Apple.  Europe's Dow Jones Stoxx 600 is at its best level today since last March and is posting gains for the fourth consecutive week.  US...

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Straight Flush: The Taiwan Straight Beats The Straight Of Hormuz

As the stock market and the FOMO chasers remain unhinged from reality (3 standard deviations above mean valuations) about as much as the crowd we watched in horror invade the Capitol yesterday, it’s time to revert to a fundamental story that is consistent, logical, and will probably make you some money that you will be able to keep and bank over the medium-term. No, not Bitcoin. It’s also an interesting story full of geopolitical intrigue.  We will keep it short and sweet with some...

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Dollar Bounces after Insurrection Put Down

Overview:  After the National Guard were called to put down an insurrection in Washington, DC, the dollar is having its best day in around a week.  The euro's three-day rally has been halted even though German factory orders surprised on the upside.  The greenback is firmer against all the major and most of the emerging market currencies today.  Equities are moving higher.  All the markets in the Asia Pacific but Hong Kong rallied today after the 8-day advance stalled yesterday.  Hong Kong...

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6/1/21: BRIC: Composite Economic Indicators: 4Q 2020

Manufacturing PMIs for BRIC economies for 4Q 2020 are discussed here: https://trueeconomics.blogspot.com/2021/01/4121-bric-manufacturing-pmis-4q-2020.html.Services PMIs are covered here: https://trueeconomics.blogspot.com/2021/01/6121-bric-services-pmis-4q-2020.html.Now, Composite PMIs:Brazil Composite PMI rose from 51.6 in 3Q 2020 to 54.4 in 4Q 2020, marking second consecutive quarter of > 50.0 readings. Average 4 quarters PMI stands at 46.2, suggesting that Brazil's economy has not,...

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6/1/21: BRIC: Services PMIs: 4Q 2020

BRIC's manufacturing PMIs for 4Q 2020 were covered here: https://trueeconomics.blogspot.com/2021/01/4121-bric-manufacturing-pmis-4q-2020.html. Now, to Services PMIs:Brazil Services PMI rose from 47.5 in 3Q 2020 to 51.4 in 4Q 2020, with aggregate 2020 levels of activity still significantly below 2019 levels. At 51.4, the index is barely statistically above 50.0 (95% confidence bound is 51.3). However, the latest quarterly reading is the first nominally above 50.0 after three consecutive...

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High Drama Weighs on the Greenback and Lifts Yields

Overview:  One of the two Georgia Senate contests remains too close to call, but the market appears to be pricing in a Democrat sweep.  The 10-year yield has punched above 1% but has offered the greenback little support.  Yesterday, the dollar-bloc currencies rose to highs since early Q2 2018 and are extending those gains today.  The Scandis are also tracking higher.  The yen is the laggard, but the greenback remains below JPY103.00  Emerging market currencies have not been deterred by the...

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Seizing The Dirt Shirt Title

In mid-December 2019, before the world had heard of COVID, China’s Central Economic Work Conference had released a rather startling statement for the world to consume. In the West, everything was said to be on the up. Central banks had responded, forcefully, many claimed, more than enough to deal with that year’s “unexpected” globally synchronized downturn.This view had been punctuated by Fed Vice Chairman Richard Clarida, among many others, who in early January 2020 said that,...

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