Archives of “July 16, 2019” day

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China press on trade war stamina – “US remains unmindful”

  
Analysis, Economy
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“US remains oblivious to China’s trade war attrition stamina”

An editorial from the rascals at China’s Global Times 😀
Says that US President Trump is exaggerating China’s GDP growth slow-down
  • showing that the US is anxious about the ongoing trade war
  • Driven by such anxieties while strategizing Trump’s 2020 re-election campaign, the White House administration has repeatedly overblown China’s trade war losses, fabricating evidence and “facts” to sway public opinion.
For more diatriabe 😀 , link
trump xi chian us president

Deutsche Bank have raised their probability for a ‘no-deal’ Brexit to near 50%

  
Analysis, Forex
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The bank says sterling is not cheap and that GBP can go much lower

DB have raised the probability for a ‘no-deal’ Brexit to 45%.
The bank acknowledges that on long term valuation models (citing PPP and FEER models) GBP is close to fair value, but say political risk is skedded asymmetrically downwards. Short GBP/JPY “remains an excellent expression ” (adding that yen is ranking far cheaper across our suite of trade-based models )
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Weekly chart below:
The bank says sterling is not cheap and that GBP can go much lower

Mnuchin says Treasury has growing concerns about crypto money laundering and Libra

  
Analysis, BITCOIN
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Comments from Mnunchin

Mnuchin
  • The US is focusing on “growing concern” about misuse of crypto
  • Has serious concern that Facebook’s Libra would be misused
  • Treasury has been very clear to Facebook and Bitcoin users that they must implement the same AML protections as traditional financial service providers
  • Bitcoin is a national security issue
  • Our #1 issue is that we don’t want bad actors using cryptocurrency
  • On Libra: “I’m not comfortable today”
  • “I have no idea why Bitcoin trades where it does”
Seems as though Mnuchin isn’t a big fan of crypto. There was some fear that he would bring down the hammer but this sounds more like a warning.
Bitcoin fell to $10,300 from $10,500 after the press briefing was announced.

Another sign of the madness in the bond market

  
  Analysis

Junk bonds trade with negative yields

More than a dozen junk bonds in Europe now trade with a negative yield, the WSJ reports.
Paying for the privilege of owning a junk bond is pure madness but it’s a sign of just how loose and stimulative central banks have grown — especially the ECB.
Even in the US, there have been some hard-to-fathom moves with the yield for BB-rated bonds in the ICE Bank of America Merrill Lynch euro high-yield index at 1.9% down from 3.6% in January.
If this is just the start of a cycle of cutting rates then it will mean far more companies will have negative yields. That will certainly help to underpin zero-yielding assets like gold.
Junk bonds trade with negative yields

US stocks edge up to new records as investors eye earnings season

  
Analysis, US Market
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Wall Street notched fresh record highs in cautious trading on Monday as investors awaited the first onslaught of quarterly earnings reports.

The S&P 500 bounced off session lows seen in afternoon trading to gain about half a point at 3,014.30. The Dow Jones Industrial Average ticked 0.1 per cent higher, and the Nasdaq Composite rose 0.2 per cent.

The modest rally extended a record run on Wall Street that was fuelled last week by expectations for looser monetary policy at the Federal Reserve. The benchmark S&P 500 secured its third closing high in as many sessions, while the Dow and tech-heavy Nasdaq set records for a second consecutive day.

Citigroup offered the opening salvo in a busy week of bank earnings. Goldman Sachs, JPMorgan Chase and Wells Fargo will file on Tuesday. Bank of America’s financials will arrive a day later.

Citi’s shares fell 0.1 per cent, paring a gain of 1.5 per cent made last week in the run-up to its numbers.

A number of further corporate reports due throughout the week will start to reveal if the US is on course for its first earnings recession since 2016, playing into investors’ perceptions of the outlook for the economy as the Trump administration’s trade dispute with Beijing continues.

Growth data from China published on Monday showed the country’s rate of quarterly expansion was its slowest in 27 years at 6.2 per cent, but there was relief that the tariff battle between the world’s two biggest economies had not taken a deeper toll on the data.

Early gains on Wall Street helped European bourses consolidate gains after an uncertain showing in the region. The international Stoxx 600 rose 0.2 per cent.

Frankfurt’s Xetra 30 was up 0.5 per cent. London’s FTSE 100 rose 0.2 per cent, with its gains underpinned by miners.

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