With Chinese trade figures for September threatening a further reset, it is worth noting (yet again) that “dollar” funding isn’t much changed in October. In fact, there are several additional references to resuming the downward slide. Gold has been steadily bid since the September payroll report on October 2, while the eurodollar futures curve behaves much as it did (almost [...]
You wouldn’t know it from stock trading or commodities, but when China reopened after its latest Golden Week holiday there was an obvious effect. Stocks have continued to surge while commodities overall have had a good week (copper up another $0.07 today, with WTI at about $50). Inside the money markets, however, China’s open was met with far less enthusiasm, [...]
Even a quick glance at recent t-bill rates commands further attention. There is obviously a lot going on in the bills market just in the past few months, which may only be unexpected in the sense that there isn’t a plain connection between US government bills and the fireworks elsewhere. T-bills used to be, however, the primary source of repo [...]
Concurrent to more survey-based indications of a US manufacturing slowdown, economists have been quick to blame overseas problems such that it leaves a “strong” US economy as a baseline. On the other side of that equation, China’s manufacturing likewise is rapidly declining but somehow with the same point of blame. Both Chinese PMI’s were decidedly weak, with the private version [...]
Before embarking on the great unknown of Q4 2015, it makes sense to try to gain a little more clarity about Q3 2015. Specifically, the “dollar” run that blasted through China and opened the prospects for both an end to Fed/Yellen faithfulness and increasing uncertainty about the true nature of economy and finance globally began around July 6; a day [...]
And so it goes, back to the Asian “dollar” again. The reverberations back and forth are nothing if not remarkable, revealing, I believe, some very real divisions between the general and “traditional” eurodollar and the new(ish) Asian “dollar.” Last week, it was the eurodollar out front while China and Hong Kong were seemingly enjoying the relief. This week started with [...]
Copper prices are getting pummeled this morning. Since copper is somewhat unique in its setting between wholesale finance and the real economy, but most especially what might fairly be termed the Asian dollar, it functions not just as a “dollar” proxy but perhaps more focused than that. We can assume by copper’s selloff today (the price for October futures delivery [...]
Outwardly, you can appreciate why central banks act as they do under serious and dangerous circumstances. Prices aren’t just what someone will pay but also represent information that is transmitted broadly to all corners. Thus, if something is going wrong there are prices that will show it, potentially diffusing contagion to other places and markets. From a child-like perspective, it [...]
I think the dominant feature of August was rising interbank “dollar” rates; everything that followed out in the open was traced to “whatever” was taking place in funding markets. Repo rates shot upward, as did unsecured LIBOR (leading to serious credit risk implications via TED). All that led into the yuan crisis escalating beyond the PBOC’s rather limited control (which [...]
There is no bottom in sight yet for China. Despite five interest rate cuts and traditional interpretations of monetary “stimulus”, the economy continues to decelerate beyond mainline understanding. Industrial production was just 6.1% in August, marking the thirteenth consecutive month (counting January, which is combined with February due to China’s New Year) below 8%, while retail sales rose 10.8%. Fixed [...]
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