Extreme Greed
Ian Reynolds
Investing and Trading | Capital Markets | Macroeconomics| Bitcoin & Decentralised Finance | Helping to Find the Money Flow | Commentator | Speaker
One minute extreme fear[Limit Up]
The next minute extreme greed (in China anyway)
Global investors continue to pile into anything Chinese as the Govt and PBoC continue unprecedented stimulus. And the world has taken note. Rather than fearing the problem that caused such a solution, politicians will be jumping on this gloabally.
The new Prime Minister in Japan is already on it, and Europe surely can't be far behind.
Only in the US does the economy seem to be good. At least until the election. This week's Nonfarm Payroll report suggested a solid economy but breaking down the numbers suggests something worse. And are the numbers reported actually correct? 20 months of extreme revisions suggest that, at the very least, they should be taken with a grain of salt.
Breaking
In Focus
China
Last week China announced its biggest economic stimulus package since 2008, aimed at addressing multiple economic challenges it currently faces, including a property market collapse and very weak consumer spending.
The stimulus package includes cutting interest rates by 30 basis points, from 2.3% to 2%, and lowering banks' reserve requirements. The government also plans to issue an additional 2 trillion yuan in bonds, equivalent to about 1.5% of China's GDP.
In response to the announcement, Chinese and Hong Kong stock markets rallied, with Chinese stocks posting their best week in 16 years and Hong Kong stocks surging at a pace unseen since 1998.
Japan
Chaos in Japan
The Nikkei opened the week down 5% on new PM in favour of raising rates, then rallied as he decided the economy is in no shape to withstand another rate hike. Then he decided there was to be a stimulus package.
And he called a snap election.
USD / YEN is back at 148 as the market looks to challenge the Bank of Japan's rate hike resolve.
Japan’s Ishiba Pledges Early General Election in October[Bloomberg]? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ??
US Economy
An apparently resilient US economy (said Powell and Nonfarm Payroll report) is at odds with market expectations of multiple rate cuts this year, although those expectations have been dialled back a bit.
An election in 4 weeks may be distorting the rhetoric.
Powell hit the airwaves on Monday at the NABE annual meeting on economic outlook.
领英推荐
Repos surged this week suggesting a bank in trouble but the reverse repo facility still elevated confuses the issue.
What central bank would be running reverse repos and repos at the same time? Obviously one borrower in the repos could be different to many lenders in reverse repos, but what chaos.
No wonder they're technically insolvent.
In The Background
CRE / Banks / CLOs
Bitcoin | US Election
Canada
England
Europe
The Eurozone CPI is still easing and the ECB should be looking to cut further.
Australia
What's Next ?
US CPI / PPI the focus.
This Week's Important Economic Indicators [London time]