Tagged: China

The Day Today 27 Jan 2014

* Greek fallout begins: ECB’s Coeure says “Mr. Tsipras must pay…. if he doesn’t pay, it’s a default and it’s a violation of European rules”
* Greece needs EUR 28bn this year, 4.3bn in March, 6.5bn in July and August; the ECB can’t help until July as it’s already close to its self-imposed limit for each country
* The Moscow Times reports that Russia now has a friend in Europe, in SYRIZA

* The US snowstorm led 7 states to declare a state of emergency, including NY, NJ and Connecticut
* Last year’s “polar vortex” knocked 1.4 pct pts off Q1 growth, according to Macroeconomic Advisers

* Japan Economy Minister Amari says BOJ could have some leeway in meeting its inflation target (last week the BOJ cut their inflation forecasts)
* DJ reports that the deletion from the BOJ’s monthly assessment of the phrase “at the earliest possible time” when it comes to hitting the inflation target, was taken after ‘intensive internal debate’

* SNB’s Danthine says they stand prepared to intervene and the Singapore model of a trading band against a basket of currencies “deserved closer examination”. He defends the removal of the floor, due to potential FX losses and: “Theoretically, the balance sheet can grow endlessly…However, in this situation the SNB could – in an extreme case – be forced to bring more francs to the market than monetarily responsible.” [But you still stand prepared to intervene do you??]

* The Netherlands added to its Gold holdings for the first time since 1998 in December

* Shanghai becomes first major Chinese region to ditch its GDP target

* S&P downgrade Russia, widely expected but it’s the first time in a decade that one of the major rating agencies has rated them as junk

* The ECB’s bank-regulatory arm has told some European banks to raise more capital given economic stagnation

* We must be nearing the bottom: President of Goldman Sachs says we may be heading to $30 oil

The ECB Day Today 22 Jan 2015

* After the leak yesterday, ECB expected to announce EUR 50bn per month of QE, totalling EUR 1.2trn

* ECB approves Emergency Liquidity Assistance to Greek banks given deposit withdrawal ahead of election

* Italy’s PM Renzi says “my dream is parity” in EUR/USD [is he short like everyone else??]

* Margin traders short position in Yen is at a record, according to Tokyo Financial Exchange Inc

* Someone is hiking – Brazil continues its rate hikes, by another 50bp, now to 12.25% and leaves door open for more

* SNB’s Zurbruegg: “we are keeping all our monetary policy options open” [but you just ditched one!]

* Lombard Odier becomes first Swiss bank to charge private clients to hold cash over 100,000 CHF

* The National Futures Association raises minimum deposit on CHF positions to 5% from 2%, and on NOK and SEK to 3% – while a Democrat calls on the CFTC to introduce new regulations

* China’s Premier says economy faces ‘downward pressure’

* OPEC’s Secretary General says oil prices won’t go down to $20-25, will rebound instead

* After Canada’s surprise cut, expect more articles like this, suggesting the Fed won’t hike until 2016

* Malaysia – foreigners now own half of the MYR denominated debt (compared to 5% nine years ago), equivalent to one-third of FX reserves

* Remember Russia’s emergency rate hike to 17% to stem losses in the rouble? Now it looks set to be reversed

* Amex to cut 4,000 jobs

The Day Today 20 Jan 2015

* China data better than expected – the stock market rallies from the 7% loss of the previous trading day:
Q4 GDP 7.3% vs 7.2% exp
Dec Retail Sales 11.9% YoY vs 11.7 exp
Dec IP 7.9% vs 7.4 exp
Dec Fixed Asset Invmt 15.7% vs 15.7 exp

* France’s Hollande lets the cat out of the bag, appearing to pre-announce for the ECB!: “On Thursday, the ECB will take the decision to buy sovereign debt, which will provide significant liquidity to the European economy and create a movement that is favorable to growth”
* Germany’s leading tabloid Bild warns that QE risks unleashing a “dramatically devalued” Euro, reducing reform in the periphery countries
* Politicians are weighing in on the idea that ECB sovereign bond-buying will reside with national central banks rather than the ECB itself – Irish FinMin Noonan: “I believe that if it becomes the function of national central banks…then I think it will be ineffective”

* Mervyn King (remember him?) warns that more QE isn’t the answer: “We have had the biggest monetary stimulus that the world must have ever seen, and we still have not solved the problem of weak demand. The idea that monetary stimulus after six years … is the answer doesn’t seem (right) to me”

* European banks have fewer bad loans than the Japanese did before they began QE, but are not in as good shape as US banks before they did QE, according to JPM and MS

* Denmark cut rates back down to their 2012 lows, at -0.20% from -0.05%, and may do more after the ECB decision on Thursday

* Latest poll puts SYRIZA 6.5 pct pts ahead
* All you need to know about how Greece is going to pan out here – it’s the risk that Syriza falls apart that you need to worry about

* The Bundesbank is part way through its transfer of Gold from Paris and New York back to Frankfurt – they announced this plan in 2013, half of all gold reserves to be in FFT by 2020

* 3 reasons UK interest rates won’t rise this year: by Ernst & Young

The Day Today 15 Jan 2015

* India unexpectedly cuts 25bp to 7.75% due to lower inflation, the stock market and the rupee rally

* S Korea cuts its GDP and inflation forecasts by 0.5 pct pts

* Fed Beige Book shows signs of wages increasing

* You know this story by now: Yields on Finland 5yr yield Swiss 7yr turn negative

* Finland emerges as the big protestor against Greece bailout deal

* Carney points out that the Scottish referendum result was a good one given the oil price slide: “It is a negative shock to the Scottish economy, but it is a negative shock substantially mitigated by the fiscal arrangements in the UK,”

* Catalonia to hold early election on Sept 27

* Russia to use reserves from its $88bn reserve fund to defend the rouble

* McKinsey sees declining global population hitting GDP growth by 40% over the next 50 years

* For the first time more new businesses in America are dying than are being created

* Chinese yuan in the top 5 traded currencies last year, says EBS

* Positive correlation between the dollar and the S&P is at its highest since 2003 – it used to be negative, will it switch back again? ask BAML


The Day Today 13 Jan 2014

* ECB Nowotny confirms that the debate is all about whether national central banks should bear the risk of the QE purchases, or should it be shared amongst Eurozone members
* ECB Noyer: “In my view, such a program can be launched only if a majority of the debt would continue to be held by private investors” – so there should be a cap
* ECB Makuch (Slovakia) says a country’s exit from the Eurozone could be managed
* While RBS argues the programme will reach EUR 4.5trn, 10 yr German yields to hit 0.13%, 10 yr Italy 1%

* Japan 5yr yield falls to zero for the first time
* But the BOJ may have to do more, as nudged by economy minister Amari: Lower oil prices aren’t necessarily a bad thing for the economy, but they are a negative factor for the BOJ’s price target.”

* This is the kind of criticism happening in Germany: President of the Ifo says “The risk of deflation is just a pretext for quantitative easing, for hammering out a bailout program for southern Europe”

* Fed Williams: “I would expect by June that the argument pro and con for lifting off rates will be probably a close call”
* Fed Lockhart: ” “I’d excise ‘patient’ if at a given meeting I felt we were likely to want to move at the following meeting,”
* Fed Funds rate prices 15% chance of hike at June meeting, up from 5% a month ago but down from 20% pre payrolls; 51% chance of Sept hike and 79% by Dec
* Fixed income managers see US 10yr at 3% by year-end
* Although there are still articles quoting people like this: “The fact that rates are going up this year is not in people’s view . . . That could mean a big upward move in yields that will lose a lot of people money”

* NY Fed survey shows inflation expectations remain steady

* Saudi prince says we’ll never see $100 oil again, and that conspiracy theory that the oil price fall is designed to hurt Putin is “baloney”

* The Telegraph chooses to spin petrol at 99p as deflationary doom
* BRC Retail Sales shows worst December for retailers since 2008

* Alcoa upbeat as aluminium demand is strong and oil price fall means its cheaper for them to produce

* China’s exports and imports beat expectations

* Last year was the second-worst for John Paulson, one of his funds fell 36%