Archives of “July 2019” month

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IMF’s Lipton: We still see the global economy as sluggish

  
Analysis, Economy

Comments by acting IMF chief, David Lipton

David Lipton
  • Sluggish growth raises concern that a response is needed
  • China’s growth to slow gradually and more if trade dispute worsens
  • US economy has low jobless rate but no inflation pickup
  • All of Europe’s policy levers need to be ready for use
  • IMF baseline scenario is not for the world economy to stall or fall into a recession
He’s covering pretty much everything as he speaks in an interview with Bloomberg but isn’t really telling us much that we don’t already know. In case you weren’t aware, Lipton is now the acting IMF chief after Lagarde relinquished her position on 2 July as she is nominated to head the ECB next after October.

EUR/GBP hits fresh six-month high amid weaker pound

  
Analysis, Forex
  Tags

Can EUR/GBP firmly hold a break above 0.9000 today?

EUR/GBP D1 16-07

The pair has been knocking on the door of the 0.9000 handle over the past two weeks and is now hitting a fresh six-month high as the pound slips on the day. If buyers can manage a daily break above the 0.9000 handle, I reckon it could keep the rally going for a while more towards the highs seen in December and January.
As for the pound weakness today, I want to argue that it’s largely on the back of sentiment/flows but with key UK data set to be released later on today, this isn’t the first time we’re seeing something like this happen (if you catch my drift).
Let’s see what the labour market report has to offer later today before drawing those conclusions but either way, it hasn’t been a great last ten weeks for the pound against the euro and EUR/GBP bulls don’t look like keeping their horns away just yet.

Nikkei 225 closes lower by 0.69% at 21,535.25

  
Analysis, Global Indices

Tokyo’s main index closes lower in mixed session for Asian equities

Nikkei 16-07

Japanese stocks aren’t having the best of days with all sectors posting losses in trading today. Industrials and consumer staples were the heavy losers and that is contributing to the decline in the Nikkei after the break yesterday.

Chinese equities are mixed as the Hang Seng is up by 0.2% but the Shanghai Composite is down by 0.2%. Investors remain cautious for the most part with US retail sales data still to come later and little direction seen in US-China trade talks still.
Overall, markets remain more steady in general with US futures little changed and Treasury yields also near flat levels. 10-year yields are holding at highs of 2.092% currently but are only 0.3 bps higher on the session.
As such, that isn’t giving currencies much to work with as well. USD/JPY holds just above the 108.00 handle now but maintains a narrow trading range today.

ICYMI – US, China may have another trade call this week

  
Analysis, Politics

This was according to US Treasury secretary, Steven Mnuchin

US China

He was briefing reporters at the White House yesterday:

“We expect to have another principal-level call this week, and to the extent we make significant progress, I think there’s a good chance we’ll go there (Beijing) later.”

This would be the second time that both sides are officially communicating (after the trade call last week) following the Trump-Xi meeting in Osaka at the end of June. All I can say is… Don’t hold your breath if you’re expecting anything noteworthy any time soon.

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.
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