• Tag Archives Yuan
  • Gold Market Morning: June-21-2017: Gold still stabilizing below $1,250

    Gold Today – New York closed at $1,243.50 yesterday after closing at $1,251.5 yesterday. London opened at $1,246.00 today.
    Overall the dollar was slightly stronger against global currencies, early today. Before London’s opening:
    – The $: was slightly stronger at $1.1145 after yesterday’s $1.1155: 1.
    – The Dollar index was stronger at 97.66 after yesterday’s 97.57.
    – The Yen was stronger at 111.14 after yesterday’s 111.39:$1.
    – The Yuan was slightly weaker at 6.8264 after yesterday’s 6.8258: $1.
    – The Pound Sterling was weaker at $1.2627 after yesterday’s $1.2659: 1.
    Yuan Gold Fix
    Despite the central Bank in Hong Kong statement of yesterday that it wanted a stable exchange rate to the dollar, the Yuan has weakened a little in the last two days. This does not mean the policy has changed, just as it will not be a fixed exchange rate.
    What is becoming clear is that Shanghai’s pricing power over the gold price is being proved this week and last, as it has been leading the way both ways.

    This post was published at GoldSeek on 21 June 2017.


  • Gold’s Pricing Power Moving East – Part 2

    China excluded from the global gold price or arbitrage includes it?
    China is unhappy that gold prices should be driven by U. S. and dollar concerns. But many state that because there is no free flow of gold in and out of China, China will remain a parochial market, not integrated into the global gold market. Nothing is now further from the truth.
    The author has worked with successful arbitrageurs in London in the past, so we can clearly see that through the London and Shanghai Gold Exchanges via bullion banks such as ICBC/Standard, HSBC and many others, arbitrage in gold is not just feasible but practiced.
    Any overweight London gold stocks can easily be sent to Shanghai from, in particular the ICBC/Standard branch in London that control two warehouses capable of holding 3,500 tonnes of physical gold. With this bank being a ‘market maker’ in London and a member of the LBMA price setting body, such a trading activity would be consistent with its normal functions.
    As to gold leaving China, it is not permitted, but the export of Yuan is. So a sale in Shanghai of gold receives Yuan which can be exported to buy gold in London. This is, in essence, giving arbitrageurs the ability to lower prices in Shanghai and raising them in London.
    Capital Controls in China do not pose a hurdle for this business. We believe that while capital exiting China is now heavily restricted, it is not withheld for the purchase and import of gold bullion.
    What this trade does do, is to smooth out price differentials between Shanghai and London. With Shanghai’s physical gold prices being more representative of physical gold demand and supply [due to volumes of gold traded] it is inevitable that Shanghai becomes the leading gold Benchmark pricer in the future.

    This post was published at GoldSeek


  • Gold and Silver Market Morning: June 19 2017 – Gold stabilizing around $1,250!

    Gold Today – New York closed at $1,256.50 Friday after closing at$1,254.60 Thursday. London opened at $1,250.20 today.
    Overall the dollar was slightly weaker against global currencies, early today. Before London’s opening:
    – The $: was slightly weaker at $1.1188 after Friday’s $1.1174: 1.
    – The Dollar index was slightly weaker at 97.24 after Friday’s97.34.
    – The Yen was stronger at 111.18 after Friday’s 111.31:$1.
    – The Yuan was almost unchanged at 6.8154 after yesterday’s6.8152: $1.
    – The Pound Sterling was stronger at $1.2780 after yesterday’s $1.2774: 1.
    Yuan Gold Fix
    New York closed at almost the same level as Shanghai did on Friday. This morning see Shanghai $3 higher, but London ahead of its open was trying to pull the price down a few dollars to $1,250, trying to guess the opening mood in London.
    Hong Kong’s central bank has stated that it prefers a stable exchange rate against the dollar. It is not independent of Shanghai and, judging by today’s exchange rate the People’s Bank of China agrees as we see the Yuan virtually unchanged today. This will allow us to see more clearly the differences between the Shanghai gold Exchange prices and London and New York.

    This post was published at GoldSeek on 19 June 2017.


  • Quiet Start To Quad Witching: Stocks Rebound Around The Globe, BOJ Hits Yen

    Today is quad-witching opex Friday, and according to JPM, some $1.3 trillion in S&P future will expire. Traditionally quad days are associated with a rise in volatility and a surge in volumes although in light of recent vol trends and overnight markets, today may be the most boring quad-witching in recent history: global stocks have again rebounded from yesterday’s tech-driven losses as European shares rose 0.6%, wiping out the week’s losses.
    USD/JPY climbed to two-week high, pushing the Nikkei higher as the BOJ maintained its stimulus and raised its assessment of private consumption without making a reference to tapering plans, all as expected. Asian stocks were mixed with the Shanghai Composite slightly softer despite the PBOC injecting a monster net 250 billion yuan with reverse repos to alleviate seasonal liquidity squeeze, and bringing the net weekly liquidity injection to CNY 410 billion, the highest in 5 months, while weakening the CNY fixing most since May. WTI crude is up fractionally near $44.66; Dalian iron ore rises one percent. Oil rose with metals. Treasuries held losses as traders focused on Yellen hawkish tone.
    The MSCI All Country World Index was up 0.2%, and after the latest global rebound, the value of global stocks is almost equal to that of the world’s GDP, the highest such ratio since th great financial crisis, BBG reported.

    This post was published at Zero Hedge on Jun 16, 2017.


  • Gold Market Morning: June-16-2017: Gold stabilizing after the Fed

    Gold Today – New York closed at $1,254.60 yesterday after closing at $1,262.70 Wednesday. London opened at $1,255.70 today.
    Overall the dollar was slightly stronger against global currencies, early today. Before London’s opening:
    – The $: was slightly weaker at $1.1174 after yesterday’s $1.1164: 1.
    – The Dollar index was slightly stronger at 97.34 after yesterday’s 97.28.
    – The Yen was weaker at 111.31 after yesterday’s 109.65:$1.
    – The Yuan was weaker at 6.8152 after yesterday’s 6.8019: $1.
    – The Pound Sterling was stronger at $1.2774 after yesterday’s $1.2696: 1.
    Yuan Gold Fix
    While London and New York are holding yesterday’s [after the Fed] levels Shanghai has pulled back but not so far and we are now seeing New York $6 lower than Shanghai and London also $6 lower than Shanghai today. This is basically a repeat of yesterday’s differentials.
    Certainly Shanghai did not pull gold back as much as the other centers on the back of the Fed’s rate rise and statement. It does appear that this move in U. S. rates is now factored in.
    Silver Today – Silver closed at $17.13 yesterday after $17.13 at New York’s close Wednesday.
    LBMA price setting: The LBMA gold price was set today at $1,256.60 from yesterday’s $1,260.25. The gold price in the euro was set at 1,124.42 after yesterday’s 1,128.75.
    Ahead of the opening of New York the gold price was trading at $1,255.00 and in the euro at 1,124.25. At the same time, the silver price was trading at $16.78.

    This post was published at GoldSeek on 16 June 2017.


  • Gold Market Morning: June-15-2017 — Gold on the back foot after the Fed!

    Gold Today – New York closed at $1,262.70 yesterday after closing at $1,275.60 Tuesday. London opened at $1,260.00 today.
    Overall the dollar was stronger against global currencies, early today. Before London’s opening:
    – The $: was stronger at $1.1164 after yesterday’s $1.1217: 1.
    – The Dollar index was stronger at 97.28 after yesterday’s 96.92.
    – The Yen was stronger at 109.65 after yesterday’s 110.14:$1.
    – The Yuan was weaker at 6.8019 after yesterday’s 6.7976: $1.
    – The Pound Sterling was weaker at $1.2696 after yesterday’s $1.2785: 1.
    Yuan Gold Fix
    Yesterday global gold markets saw volatility in all three markets ahead of the Fed. Once the statement was out global gold markets settled and steadied around $1,260, with London $5 lower than Shanghai.
    We expect today will see a digestion of Mrs Yellen’s statement followed by gold’s reaction.
    Silver Today – Silver closed at $17.13 yesterday after $16.76 at New York’s close Tuesday.

    This post was published at GoldSeek on 15 June 2017.


  • Gold Market Morning: June-14-2017 — Gold waiting for the Fed!

    Gold Today – New York closed at $1,268.60 yesterday after closing at $1,268.90 Monday. London opened at $1,267.24 today.
    Overall the dollar was slightly weaker against global currencies, early today. Before London’s opening:
    – The $: was slightly weaker at $1.1217 after yesterday’s $1.1212: 1.
    – The Dollar index was weaker at 96.92 after yesterday’s 97.04.
    – The Yen was slightly stronger at 110.14 after yesterday’s 110.16:$1.
    – The Yuan was slightly stronger at 6.7976 after yesterday’s 6.7979: $1.
    – The Pound Sterling was stronger at $1.2785 after yesterday’s $1.2700: 1.
    Yuan Gold Fix
    As you can see from the above, Shanghai traded both yesterday and today lower than New York and London. This was the first time we have seen that happen! New York closed higher than Shanghai yesterday and London opened higher than Shanghai. On these numbers Shanghai is not a buyer from the west today.
    We have heard that China stands accused of gold price manipulation. They are accused of keeping prices low until they have acquired a particular number of tonnes. Meanwhile, Shanghai prices have consistently been at a premium to western prices. This is not the path down.

    This post was published at GoldSeek on 14 June 2017.


  • Gold Market Morning: June-13-2017: Gold waiting for the Fed tomorrow!

    Gold Today – New York closed at $1,268.90 yesterday after closing at $1,266.00 Friday. London opened at $1,262 today.
    Overall the dollar was slightly weaker against global currencies, early today. Before London’s opening:
    – The $: was slightly stronger at $1.1212 after yesterday’s $1.1220: 1.
    – The Dollar index was slightly weaker at 97.04 after yesterday’s 97.13.
    – The Yen was slightly weaker at 110.16 after yesterday’s 109.94:$1.
    – The Yuan was slightly stronger at 6.7979 after yesterday’s 6.7985: $1.
    – The Pound Sterling was slightly weaker at $1.2700 after yesterday’s $1.2704: 1.
    Yuan Gold Fix
    New York closed lower than Shanghai yesterday and London opened lower than Shanghai as the gold price continues to consolidate slightly lower.
    Silver Today – Silver closed at $16.94 yesterday after $17.22 at New York’s close Friday.
    LBMA price setting: The LBMA gold price was set today at $1,261.30 from yesterday’s $1,269.25. The gold price in the euro was set at 1,124.55 after yesterday’s 1,131.44.
    Ahead of the opening of New York the gold price was trading at $1,263.85 and in the euro at 1,121.43. At the same time, the silver price was trading at $16.83.
    Gold (very short-term)
    The gold price should consolidate, in New York today.
    Silver (very short-term)
    The silver price should consolidate with a firm bias, in New York today.

    This post was published at GoldSeek on 13 June 2017.


  • Gold Market Morning: June-12-2017: Gold finds bottom and is reacting to currency moves now!

    Gold Today – New York closed at $1,266.00 Friday after closing at $1,279.50 Thursday. London opened at $1,267.00 today.
    Overall the dollar was weaker against global currencies, early today. Before London’s opening:
    – The $: was weaker at $1.1220 after Friday’s $1.1178: 1.
    – The Dollar index was weaker at 97.13 after Friday’s 97.44.
    – The Yen was stronger at 109.94 after Friday’s 110.37:$1.
    – The Yuan was slightly stronger at 6.7985 after Friday’s 6.7988: $1.
    – The Pound Sterling was weaker at $1.2704 after Friday’s $1.2720: 1.
    Yuan Gold Fix
    New York closed lower than Shanghai on Friday but Shanghai was higher today as the U. S. dollar started to weaken again. London opened lower than Shanghai but was off its bottom. The London price setting lifted the gold price up above spot this morning.
    Silver Today – Silver closed at $17.22 Friday after $17.41 at New York’s close Thursday.
    LBMA price setting: The LBMA gold price was set today at $1,269.25 from Friday’s $1,274.25. The gold price in the euro was set at 1,131.44 after Friday’s 1,139.76.
    Ahead of the opening of New York the gold price was trading at $1,269.15 and in the euro at 1,135.19. At the same time, the silver price was trading at $17.14.
    Gold (very short-term)
    The gold price should consolidate with a firm bias, in New York today.
    Silver (very short-term)
    The silver price should consolidate with a firm bias, in New York today.

    This post was published at GoldSeek on 12 June 2017.


  • China’s ‘official’ gold reserves unchanged for 7th straight month — Lawrie Williams

    Latest reports from the People’s Bank of China for May indicate that the World’s No. 2 economic power has kept its official gold reserve unchanged – at 59.24 million ounces (1,842.6 tonnes) – for the seventh successive month. Indeed China’s officially reported gold reserves have remained unaltered since the Chinese renminbi (or yuan) was confirmed as an integral part of the IMF’s Special Drawing Right (SDR) back in October last year. Currently the Chinese currency accounts for 10.92% of the basket of currencies which make up the SDR – the others are the US dollar 41.73%, the Euro 30.93%, the Japanese yen 8.33% and the pound sterling at 8.09%.
    The IMF notes on its website that the SDR was created in 1969 as a supplementary international reserve asset, in the context of the Bretton Woods fixed exchange rate system. A country participating in this system needed official reserves – government or central bank holdings of gold and widely accepted foreign currencies – that could be used to purchase its domestic currency in foreign exchange markets, as required to maintain its exchange rate. But the international supply of two key reserve assets – gold and the US dollar – proved inadequate for supporting the expansion of world trade and financial flows that was taking place. Therefore it was decided to create a new international reserve asset under the auspices of the IMF.
    Although the idea was to create a new reserve currency as defined by the SDR basket, the composition of which is reviewed every five years, the inclusion of a currency in the basket does lend a degree of acceptance as a potential reserve currency in its own right, which is presumably why China was so keen for the renminbi to become part of the SDR basket. To help achieve this the Chinese central bank began to announce monthly additions to its gold reserves in the interests of transparency. Prior to that it had only announced its gold reserve increases at five or six year intervals saying that this additional gold, which it then moved into its official reserve, had been held in accounts which were outside the purview of its gold reserve reporting to the IMF.

    This post was published at Sharps Pixley


  • Gold Market Morning: June-9-2017: Gold fell but continues to consolidate!

    Gold Today – New York closed at $1,279.50 yesterday after closing at $1,293.20 Wednesday. London opened at $1,275.00 today.
    Overall the dollar was stronger against global currencies, early today. Before London’s opening:
    – The $: was stronger at $1.1178 after yesterday’s $1.1232: 1.
    – The Dollar index was stronger at 97.44 after yesterday’s 96.89.
    – The Yen was weaker at 110.37 after yesterday’s 110.07:$1.
    – The Yuan was slightly weaker at 6.7988 after yesterday’s 6.7954: $1.
    – The Pound Sterling was much weaker at $1.2720 after yesterday’s $1.2941: 1.
    Yuan Gold Fix
    New York and Shanghai stayed at the same level yesterday and this morning. New York led the way down and Shanghai took it down further. London opened at the same level as Shanghai. The global gold markets continue to move together.
    Silver Today – Silver closed at $17.41 yesterday after $17.69 at New York’s close Wednesday.

    This post was published at GoldSeek on 9 June 2017.


  • China’s gold imports seen jumping 50% as haven demand booms

    China, the world’s biggest gold market, may boost imports through Hong Kong by about half this year as local investors seek to protect their wealth from currency risks, a slowing property market, and volatile stocks, according to the Chinese Gold & Silver Exchange Society.
    Mainland China is set to import about 1,000 metric tons from the territory in 2017, said Haywood Cheung, president of the century-old exchange in Hong Kong which trades physical gold and silver. That compares with net purchases of 647 tons last year and would be the biggest since 2013, data from the Hong Kong Census and Statistics Department compiled by Bloomberg show.
    Demand is rising on concerns over property, share and bond markets and the outlook for the yuan, amid a government drive to reduce leverage in the financial system. Local consumption was up 15 percent in the first quarter, with sales of bars for investment climbing more than 60 percent and dwarfing a 1.4 percent rise in jewelry buying, according to data from the China Gold Association. China also imports gold from Switzerland.

    This post was published at bloomberg


  • Gold Market Morning: June-7-2017: Gold pausing before tackling $1,300!

    Gold Today – New York closed at $1,293.80 yesterday after closing at $1,279.60 Monday. London opened at $1,292.65 today.
    Overall the dollar was slightly weaker against global currencies, early today. Before London’s opening:
    – The $: was slightly weaker at $1.1254 after yesterday’s $1.1246: 1.
    – The Dollar index was slightly weaker at 96.68 after yesterday’s 96.73.
    – The Yen was stronger at 109.30 after yesterday’s 109.52:$1.
    – The Yuan was stronger at 6.7931 after yesterday’s 6.7954: $1.
    – The Pound Sterling was slightly weaker at $1.2898 after yesterday’s $1.2904: 1.
    Yuan Gold Fix
    New York rose to the same level as Shanghai yesterday. Today, Shanghai is pausing at the same level. London opened at almost the same level as Shanghai.
    Once again we see all three centers with gold prices at the same level. This is only the second time this has happened. The first was in the last month.
    Silver Today – Silver closed at $17.69 yesterday after $17.57 at New York’s close Monday.

    This post was published at GoldSeek on 7 June 2017.


  • Gold and Silver ETF Demand Lacking as Prices Jump, Yuan Leaps vs. Dollar

    Gold prices jumped to new 7-week highs at $1291 per ounce on Tuesday, again testing the 6-year downtrend line in place since the metal’s 2011 record highs as Western stock markets fell with longer-term interest rates.
    After the ISM Prices Paid measure of inflation in manufacturing costs “tanked” in Friday’s report for May, 10-year US Treasury yields today fell again to post-Trump election lows of 2.15%.
    Crude oil also extended its drop despite the “freezing out” of Qatar by other Gulf states over what Saudi Arabia and now US President Trump call the “funding of radical ideology.”
    British police meantime said they and the MI5 security service had one of Saturday night’s 3 suicide-murderers in London Bridge under close surveillance back in 2015 when he appeared on a national TV documentary entitled The Jihadi Next Door.
    “Gold is not just for turbulent times, it has been a good source of returns over the last 10, 20 and 30 years,” said former UBS and then Paulson & Co. strategist John Reade, now chief market strategist for the mining-backed World Gold Council, at the Asia Pacific Precious Metals Conference in Singapore.

    This post was published at FinancialSense on 06/06/2017.


  • Gold and Silver Market Morning: June 6 2017 – Gold poised to attack $1,300!

    Gold Today – New York closed at $1,279.60 yesterday after closing at$1,278.20 Friday. London opened at $1,289.50 today.
    Overall the dollar was weaker against global currencies, early today. Before London’s opening:
    – The $: was slightly stronger at $1.1246 after yesterday’s $1.1264: 1.
    – The Dollar index was slightly weaker at 96.73 after yesterday’s96.77.
    – The Yen was stronger at 109.52 after yesterday’s 110.51:$1.
    – The Yuan was stronger at 6.7954 after yesterday’s 6.8036: $1.
    – The Pound Sterling was barely changed at $1.2904 afteryesterday’s $1.2905: 1.
    Yuan Gold Fix
    While New York saw the gold price rise a little it was Shanghai that gave the spurt to the gold price trading at $1,293 late in their day today. London was pulled up at the opening to just $4 below Shanghai.
    Silver Today – Silver closed at $17.57 yesterday after $17.52 at New York’s close Friday.
    LBMA price setting: The LBMA gold price was set today at$1,287.85 from yesterday’s $1,280.70. The gold price in the euro was set at 1,144.40 after yesterday’s 1,137.04.

    This post was published at GoldSeek on 6 June 2017.


  • Bond Yields Tumble To 2017 Lows After China Said “Ready To Buy More US Treasuries”

    Confirming what we reported two weeks ago, when we said that based on Treasury custody holdings at the NY Fed “foreign central banks have been quietly scooping up US treasurys“, moments ago Bloomberg reported that China is prepared to increase its holdings of U. S. Treasuries “as officials judge the assets are becoming more attractive than other sovereign debt and as the yuan stabilizes.”
    Citing source, Bloomberg adds that Chinese policy makers expect that U. S. government debt will be more attractive compared with other countries’ assets, and again confirming what we showed on May 25, adds that China has recently stopped reducing its holdings of U. S. bonds.
    While the move is a reverasal to China’s liquidation of US paper in 2016, when reduced its ownership of Treasuries by the most on record as it sought to defend a weakening yuan, it merely confirms recent trends observed in both the Treasury’s TIC statement and custody holdings data. Bloomberg confirms as much, reporting that “China has since changed strategy, adding to its holdings in the two months through March.”
    Following the Bloomberg report, the 10Y Treasury yield dropped to a new YTD low of 2.136%, while the 5Y has slid to 2017 lows of 1.6909%.
    For those who missed it, here are excerpts from our May 25 report titled “Foreign Central Banks Are Quietly Scooping Up US Treasurys“, which previewed all that Bloomberg just reported.
    As the latest custody data from the Fed reveals, in 2017, debt held at the Fed on behalf of foreign central banks has jumped by $61.2 billion to $2.922 trillion, the highest level since June 2016.

    This post was published at Zero Hedge on Jun 6, 2017.


  • Gold and Silver Market Morning: June 5 2017 – Gold consolidating with a positive bias!

    Gold Today – New York closed at $1,278.20 Friday after closing at$1,270.10 Thursday. London opened at $1,281.00 today.
    Overall the dollar was weaker against global currencies, early today. Before London’s opening:
    – The $: was weaker at $1.1264 after Friday’s $1.1222: 1.
    – The Dollar index was weaker at 96.77 after yesterday’s 97.20.
    – The Yen was stronger at 110.51 after Friday’s 111.51:$1.
    – The Yuan was stronger at 6.8036 after Friday’s 6.8153: $1.
    – The Pound Sterling was stronger at $1.2905 after yesterday’s $1.2875: 1.
    Yuan Gold Fix
    New York closed $4.17 lower on Friday than the Shanghai Gold Exchange was trading at today ahead of Monday’s opening. London opened at around $1 lower than Shanghai was trading earlier today. These are very small price differences evidencing arbitrage operations at very professional levels [likely banking operations]. We have been watching these markets, as you know, very carefully over the last year. Our conclusion is that we are watching global gold market developments that are much more significant than the 2005 ‘de-hedging’ operations by gold mining companies and the establishment of gold ETFs by the World Gold Council. These changes not only bring structural changes to the global gold market but demonstrate where gold is going in the future. As China has integrated gold into its financial system, the weight of physical gold trading is being brought to bear on global gold prices. As theemphasis moves to physical dealing in gold, so its importance as an international reserve asset as well as an asset in support of global finances will increase in the months and years to come.

    This post was published at GoldSeek on 5 June 2017.


  • How To Destroy The Value Of College

    It wasn’t that long ago that I could resoundingly recommend that teens in the US who had an interest in any sort of “STEM” field go to college and get their degree.
    I’ve not been able to make that argument for the “social arts” or the “liberal arts” for close to 20 years, but as recently as 10 years ago it was still an excellent argument, even at the inflated, debt-laden price, for STEM-related fields.
    About five years ago I started to sound the alarm even in the STEM fields, as the offshoring and H1b abuse got bad enough that with few exceptions the risk had risen to unacceptable levels even in those fields, considering that your risk profile extends out at least four years from when you go to college and usually five or six.
    Now, today, it appears I was right to be concerned — and I can no longer make any sort of argument for post-secondary education at today’s prices in the United States.
    Monthly salaries plummeted 16 percent to 4,014 yuan ($590) this year for a second-straight annual decline, data from recruitment site Zhaopin.com show. The Ministry of Education estimates that 7.95 million will graduate this year, almost the population of Switzerland.

    This post was published at Market-Ticker on 2017-06-05.


  • Ray Dalio Approves Of China Crushing The Yuan Bears

    Shortly after publishing his latest blog post in which Ray Dalio, the head of the world’s biggest hedge fund Bridgewater, said he is growing increasingly worried about Donald Trump’s “pursuit of so much conflict”, adding that “the more I see Donald Trump moving toward conflict rather than cooperation, the more I worry about him harming his presidency and its effects on most of us” (we will have more to say on that momentarily), Dalio tweeted his thoughts on China’s recent mauling of Yuan shorts.
    In what may come as a surprise to free market purists, Dalio was unexpectedly supportive of China’s decision to once again intervene in the FX market and crush countless Yuan bears after the recent Moody’s downgrade, even if it set back China’s currency “liberalization” process – for which China was so richly rewarded by the IMF last year when the Yuan became a member of the SDR basket – by months if not years, for three reasons. This is what he tweeted moments ago:
    China’s policy makers’ decision to squeeze the shorts in its currency is, in my opinion, a smart move because it:
    a) demonstrates the Chinese government’s power,
    b) discourages those who would lose confidence in its currency (in turn lessening the desire to sell the yuan), which helps stabilize the balance of payments and currency, and
    c) produces a tightening that works well in conjunction with tighter monetary policies to tighten credit (which is appropriate now).
    a) demonstrates the Chinese government's power, b) discourages those who would lose confidence in its currency
    — Ray Dalio (@RayDalio) June 5, 2017

    This post was published at Zero Hedge on Jun 5, 2017.


  • RBC Warns Equity Markets Have Entered The ‘FOMO’ Stage

    It’s risk-parity heaven right now, notes RBC’s head of cross-asset strategy Charlie McElligott, with global equities (developed and EM) AND fixed-income all continuing their torrid rallies, but McElligott warns this is a classic “from worst to first” PM-grabbing into a new “Fear Of Missing Out” stage of the equities-rally.
    Bonds remain well-bid on account of the ongoing ‘slowing into tightening’ narrative, with commodities being the only asset class (outside of volatility, of course) that is lower overnight as a ‘signal’ for the lower bond yields. This continues to be ‘falling inflation expectations’ story for rates / bonds: industrial metals continue their struggles (Chinese / PBoC deleveraging efforts, while recent efforts at STRENGTHENING yuan to stem FX outflows will FURTHER FEED global disinflation in coming months) in conjunction with Crude’s inability to get off the mat post disappointing OPEC (market still focusing on US shale supply–especially now, with the thinking post Trump’s Paris Accord drop-out that we’ll see even MORE US oil supply via increased drilling / deregulation).
    #FOMOROTATION: But today is largely an equities-centric story, as stocks can of course view the world in a ‘mutually-exclusive’ fashion from the aforementioned fixed-income ‘slowing growth’ concerns. A goldilocks interpretation of ‘easier financial conditions’ (weaker USD and lower US rates / flatter curves are a POSITIVE for large cap US corporates) against still-expansive data (yesterday’s US ADP print portending + for NFP) keeps stocks in a very ‘sweet spot,’ especially as the world is still awash in liquidity despite the ‘coming’ pivot tighter. To this point, EPFR data last night showed us that cash continues to be deployed in both equities (+$13.7B inflow in global Eq funds, a five week high absolute $ number) and bonds (+$6B inflow) as well. It seems like investors are appropriately taking their cues from very recent CB messaging: cautiously ‘slow and steady’ tightening in light of recently ‘softer’ inflation data.

    This post was published at Zero Hedge on Jun 2, 2017.