There are a great many great things afoot, so it might be understandable some transferred excitement (or dread) into the realm of global currencies. The British are set to leave the European Union, though nobody really knows what that means let alone what it might lead to. While the US was closed for MLK remembrances, sterling was all over the [...]
Inflation in China slowed somewhat in December, as the Consumer Price Index decelerated to 2.1% from 2.3% in November. Very much like in the US, Europe, and Japan, the CPI level in China continues a lengthy stretch significantly below the official monetary target. For China, the PBOC has set 3% as its definition of “price stability.” The last time inflation [...]
Chinese officials reported that exports fell 6.1% in December, following a downward revised 1.5% decline in November that was originally reported as a 0.1% gain. While the media talks about disappointment after it appeared Chinese exports might have been finally breaking out, and therefore global growth, December’s result simply continues the same pattern repeating over and over again. Over the [...]
It may seem strange that one of the primary forces behind the Bretton Woods arrangement was John Maynard Keynes. That is because what goes on in his name today is often nothing like what he proposed. This is not an endorsement of those ideas, only recognition and deep appreciation that during the worst consequences of the worst kinds of economic [...]
Then-Federal Reserve Chairman Ben Bernanke testified before Congress on May 22, 2013, that taper was for officials a strong consideration. Though QE4, the UST portion of the restored balance sheet expansion, wasn’t yet six months old and he had promised, sort of, at the start of QE3 that both would be open-ended, sort of, his message to the legislature was [...]
If the groundhog can tell us the length of winter by simply appreciating his own shadow, China’s central bank can perform something of a similar exercise and interpretation about the global eurodollar condition. The panic response of the PBOC is to immediately peg its currency, CNY, whenever a global monetary storm of sufficient fury arrives. Thus, if the PBOC sees [...]
For all the fuss about speculators in Hong Kong, China’s central bank doesn’t seem very capable of handling them. Last week the offshore RMB money rate was driven once more to ridiculous proportions, with conventional “wisdom” attributing it to intentional PBOC policy. That seemed to be the case on Thursday, where the overnight HIBOR rate (CNH) was 38.335%, but not [...]
There are times when the illusion is understandable, if still an illusion. On days like today, it surely seems like the PBOC’s power and influence has been established and displayed. The overnight HIBOR rate (CNH) was pushed to a ridiculous 38.335%, the second highest on record. And given that “drain” of RMB from offshore Hong Kong, sure enough CNY rose [...]
China’s official manufacturing PMI fell just slightly for December 2016, after rising for November to the highest since mid-2014. The overall index pulled back to 51.4 from 51.7 the previous month. The subindex for New Orders remained steady at 53.2, matching the highest point since July 2014. These PMI estimates suggest that China’s experience with the “rising dollar” has passed. [...]
Did CNY flash crash yesterday? That it is even being contemplated and argued is itself an indication of these times. According to pretty much all market data, CNY fell below 7.0 to the dollar just prior to the US open. It had been trading its usual (for the past week or so) artificial, non-volatile sideways at around 6.96 when for [...]
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