Just over a week ago, the world (at least in chemistry) celebrated Mole Day. Rather than acknowledge the small underground mammal that immediately springs to mind, Mole Day is in honor of Amadeo Avogadro, the Count of Quaregna and Cerreto, who lived in the late 18th and early 19th centuries and contributed one of the major international base units in [...]
In conventional thinking, China’s problems are China’s problems. As those related to its currency, it is believed a mere matter of either intentional policy (devaluation = export stimulus) or the outflow of “hot money” because of China’s unique circumstances. From this position, one populated by policymakers, what has transpired over the past year plus was all very confusing. It is [...]
You can only pick one. Going back to around July 11, the People’s Bank of China decided for whatever their reasons CNY had gone far enough and that the central bank would intervene to all over again to obtain a stable currency importantly against the dollar. This was nothing new, however, as the PBOC had interceded on several other notable [...]
In December 2000, the Financial Post orchestrated what it billed as a great debate, a clash of titans pitting two giants of economics against each other in a series of eight questions. Dubbed the Nobel Money Duel, on the one side was Robert Mundell, a Nobel Laureate often credited as the “father of the euro.” On the other was Milton [...]
The most remarkable aspect of the WTI crude oil futures curve this month has been its amazing ability to maintain its shape no matter which direction or by how much. Previously, as “dollar” pressures either built or ebbed, the futures curve would either steepen at the front (liquidation pressure) or flatten toward more normal backwardation (easing of the “dollar” difficulties). [...]
Starting June 8, oil prices began falling again, reversing their more optimistic trend that had lingered since February 11 long after the usual correlation to CNY was broken. In fact, by the time WTI had peaked, CNY was already being meddled with again in clear PBOC interference. Despite being backward to what was 2015’s relationship of death, by July the [...]
Back in early July, Bloomberg published a rather curious article that sounded like it was written from within the People’s Bank of China - or any other global central bank for that matter. The most prominent correlation over the past year had been CNY and everything else; or, as I wrote earlier in the year, CNY down = bad. The [...]
Last Friday the Statistics Bureau of the Japanese Ministry of Internal Affairs and Communication reported some more bad news for Prime Minister Abe and really Bank of Japan chief Kuroda. Month-over-month, the consumer price index was down again, leaving it 0.48% less in June 2016 than June 2015. This was the third consecutive month of increasingly negative year-over-year CPI estimates. [...]
On January 25, there was sudden burst of MBS repo volume in the DTCC statistics. This only covers the repo market that is visible taking place on the exchange, but without any other data for the vast majority of hidden transactions we have to assume that these are decent approximations for the whole. Since the published GC rates as well [...]
Sticking with today's Japanese theme, there is a lot to further suggest why the BoJ would be attentive to "dollars" and why it matters (for everyone). A more detailed explanation is here (subscription required). "Dollar", not dollar. BONUS CHART (to add some pertinent scale):
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