It looks like the reversal of Monday’s dramatic and frightful liquidation has held and gained in the past two days. From that we can infer, of only the near-term, that those forced repositions were enough to square the liquidity imbalance from the latest “dollar” run. The two words are related not just in a common semantic root, as liquidations are [...]
The repo rate today ticked slightly lower for the second consecutive day, suggesting, as the PBOC’s yuan fix last night, that the heaviest part of the “dollar” run has abated. The repo rates are still very high, though, which does not suggest a terminus in the “dollar” retreat; at least not yet. All three classes remain above IOER, with MBS [...]
By the behavior of the Chinese yuan itself, given the financial size here, we can readily assume that any “dollar” problem that is clearly causing the PBOC’s actions are sizable. Currencies throughout Asia are being roiled not unlike 1997 and oil prices sunk to a new “recovery” low. While that all suggests far away turmoil relevant only to those foreign [...]
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