Post Tagged with: "China"
Negative News Flow Sours Sentiment
Dollar is broadly stronger amid concerns over Greek debt rating, China tightening; stocks mixed. S&P warns plan for Greece is likely default; ECB to accept collateral unless all agencies rule default. RBA on hold, Riksbank hikes by 25bps; Moody’s finds hole in China’s local government debt
Market Update: Greece Austerity Vote, Chinese Rate Hike
Dollar is mostly weaker against the majors into Greek austerity vote; global equities rally strongly. The euro remains firm near $1.444 ahead of vote; momentum likely to continue but hurdles remain. Rumors of a potential Chinese rate hike this week surface; Turkish central bank views on lira
Small companies feel pain as China tightens
Michael Pettis writes that in the current environment is that small and medium enterprises (SMEs) are hurting, and last week’s minimum reserve hike – which came out the same day as the CPI number – will undoubtedly make things worse since any withdrawal of credit is unlikely to affect the top customers (SOEs and local governments) and will fall disproportionately on marginal borrowers
Think tank: China’s assertiveness could lead to armed conflict in Asia
A world in which basic natural resources are neither cheap nor abundant and in which the debt levels in leading economies are very high is one prone to geopolitical instability
The Shadow Banking Problem in China
In China, the persistence of inflation pressure has brought “shadow banking” into a topic of hot debate recently. According to a study issued by the People’s Bank of China in 2010, non-banking sector lending has expanded to 63.3 trillion Yuan, ($10 trillion), 44.4% of total lending activities of China’s economy
Currency News: Greek Austerity Deal, China Inflation Policy
Dollar broadly mixed as the uncertainty over the Greek persist; German IFO beats expectations. News of a Greek austerity deal with EU-IMF are positive but risk surrounding austerity vote remain. China said efforts to stem inflation are succeeding; we continue to expect 5% CNY appreciation
Chart of the Day: China’s Money Market Lending Rate
The Chinese Seven Day Repo Rate has skyrocketed to a 3-year high, suggesting a cash shortage as credit tightens
The World’s Supply and Demand for Coal
Coal prices are surging ahead even as most other commodities pull back, spurred on by expectations that metallurgical and thermal coal production will again fail to meet rising global demand this year. The result? Record profits for major coal producers like Xstrata, a surge in acquisitions from coal-hungry India, Chinese electricity shortages, and a raging carbon tax debate in Australia amid record investments in that country’s coal-heavy mining sector
Further Chinese Yield Curve Flattening to 17bps
The last time the curve was this flat was during the panic in 2008. So I am still concerned that the potential for a more abrupt slowing exists. So far growth remains robust
India and Brazil: Inverted Yield Curves
I am concerned that the emerging markets have overheated and are now reversing direction quickly. Policy rates are still low when adjusted for inflation. But, given the economic weakness now manifest across North America and Europe, the risk is clearly to the downside for now
China GDP history
This chart is for year over year ‘real’ GDP growth. Note the recurring first quarter spikes followed by dips, presumably due to front loading annual state spending and lending
Financial Shock and Awe in China
To sum up: Non-performing loans look to be a full 10% of Chinese GDP. That’s high. The Chinese government is confronting this writedown problem head-on. While a number of analysts have opinions on the measures just taken, it is far from clear what the effect will be on China and the global economy