Wednesday , October 16 2019
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Tag Archives: China

Technically Speaking: Bulls Get QE & Trade, Remain “Stuck In The Middle”

“Clowns to the left of me,Jokers to the right, here I am,Stuck in the middle with you” – Stealers Wheels __________________________ The lyrics seem apropos considering we have Trump, China, Mnuchin, the Fed, along with a whole cast of colorful characters making managing money a difficult prospect recently.  However, the good news is that over the last month, the bulls have had their wish list fulfilled. The ECB announces more QE and reduces capital constraints on foreign banks. The Fed...

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Non-Disruptive Brexit Hopes Remain Elevated

Overview: Ideas that a Brexit deal may be close is helping to firm sterling, while soft Chinese PPI offset the spike in food prices to show the weakness of the world's second-largest economy. Minutes from the meeting of the Reserve Bank of Australia earlier this month kept a door open to a rate cut before the end of the year.  Japan returned from holiday, and the Nikkei gapped higher, and its nearly 1.9% advance led the MSCI Asia Pacific Index higher. Europe's Dow Jones Stoxx 600 is...

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JKTC: the world’s LNG spot trading hub

US LNG exports, on destination-free terms, have been regarded as the game changer for the market in recent years. But this view neglects the role played by China’s rising demand, and the changes taking place among traditional LNG buyers in Northeast Asia, which are driving the rapid establishment of an LNG trading hub. The global LNG market is becoming more liquid and spot-oriented. The US tackles the supply leg of this increasingly flexible market, but the greater flexibility on the demand...

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Optimism Took the Weekend Off

Overview: Japanese and Canadian markets are on holiday today. While the US bond market is closed, equities maintain their regular hours today. Asia Pacific equities rallied, led by 1% of more gains in China, Taiwan, South Korea, and Thailand. The buying did not continue in Europe, and after a 2.3% rally before the weekend, the Dow Jones Stoxx 600 is about 0.75% lower in the European morning. US shares are trading slightly heavier, and the gap in the S&P 500 created by last Friday's...

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Michael Pettis: MMT Heaven and MMT Hell for Chinese Investment and U.S. Fiscal Spending

This is Naked Capitalism fundraising week. 1672 donors have already invested in our efforts to combat corruption and predatory conduct, particularly in the financial realm. Please join us and participate via our donation page, which shows how to give via check, credit card, debit card, or PayPal. Read about why we’re doing this fundraiser and what we’ve accomplished in the last year, and our current goal, more original reporting. By Michael Pettis, an expert on China’s economy, and professor...

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Same Three Drivers in the Week Ahead but Changing Tones

Three themes have dominated the investment climate:  US-China tensions, Brexit, and the policy response to the disinflationary forces.  None have been resolved, which contributes to the uncertainty for businesses, households, and investors.  However, the negativity that has prevailed is receding a little.  It begins with the most substantive progress on Brexit in months, but also entails a possible new tariff truce between the US and China. Indeed, we irreverently suggested that the...

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Will Monetary or Fiscal Stimulus Turnaround the Next Recession?

A recession is emerging with interest rate curves inverted, the end of the business cycle at hand, world trade falling, and consumers and businesses beginning to pull back on spending.  The question is: will monetary or fiscal stimulus turn around a recession?  In this post, we find both stimulus alternatives likely to be too weak to have the necessary economic impact to lift the economy out of a recession. Finally, we will identify the key characteristics of a coming recession and the...

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Setback for the Greenback

Overview: Conflicting headlines about US-China trade whipsawed the markets in Asia, but when things settled down, perhaps, like the partial deal that has been hinted, net-net little has changed. Asian equities were mixed, with the Nikkei, China's indices, and HK gaining, while most of the others slipped lower. The 0.9% gain in the S&P 500 yesterday failed to lift European stocks, and the Dow Jones Stoxx 600 is near the week's lows. US shares also are trading softer. Benchmark...

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Hope is Trying to Supplant Pessimism Today

Overview: The 1.5% drop in the S&P 500 and the deterioration of US-China relations and the prospects of a no-deal Brexit failed did not carry over much into today's activity. Asia Pacific equities were mostly a little lower, though China and India bucked the regional trend, while Korea was closed for a national holiday. Taiwan led the losses amid a sell-off in semiconductor stocks. Europe's Dow Jones Stoxx 600 is little changed as small early losses were reversed. US shares are...

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Not a Good Day for Negotiators

o Overview: The re-opening of Chinese markets after a long holiday did not produce the volatility that many expected. Chinese stocks alongside most Asia markets traded higher today, and the yuan advanced. After opening higher and extending its recent rally, Europe's Dow Jones Stoxx 600 turned down, even though Germany announced an unexpected gain in August industrial output. US shares are trading a bit lower. Benchmark 10-year bonds are little changed. The dollar is mostly softer. Among...

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