World economy talk

[uls]

The S&P 500 is back to the level where i went cash last year. Buy and hold they said. Whatever.

LaZy bathory

EM outflow going to US stocks

you're missing the rally

[Lady Bathory]

LaZy bathory

EM outflow going to US stocks

you're missing the rally

You think the rally will last? With interest rates and the dollar rising? I'm ok sitting this one out i'm up for the year anyway. I'll let the December rate hike pass, wait for Trump to warm his seat in the oval office, then reenter the market some time in Q1 when things become clearer.

[Lady Bathory]

PSEI trading halted.

[denkatol]

why trading halted

[EQAddict]

What halted trading?

[Lady Bathory]

Technical issues they say.

[jut703]

System glitch. Just like yesterday.

[EQAddict]

What level is it at now?

[Lady Bathory]

Asian equities have decoupled from China. China is deep in red while the rest of Asia is green. Looks like the panic outside China has receded as other markets are no longer tracking SHCOMP.

Depreciation pressure: China set the yuan reference rate a little weaker today. The small devaluation may be indicative of more to come. Reports from HK say some depositors are converting RMB to USD or HKD fearing further devaluation.

[safeorigin]

Funny in 2008. Funnier in 2015



- - - - - - - - - - - - - - - - - - - - - -

Funny in 2008. Funnier in 2015

[safeorigin]

[Lady Bathory]

Depreciation pressure: USDCNY reference rate today 6.4043 vs 6.3987 yesterday. Offshore RMB (USDCNH) 6.5. The spread between spot and 12-month USDCNY NDFs suggests further RMB depreciation.

[badkuk]

Just my luck to come across this post while having lunch. Dunno what was worse, the crap reference or the message it sent :p

[safeorigin]

Haha, because it's that terrible

[dreamur]

It is still a roller-coaster ride. Red-green-red-green.........

[Lady Bathory]

USDJPY now below 120.00 on safe haven bid.

At dinner last night...
Dad: Did you get wiped out?
Me: No, Pa, i told you i went 100% cash at the end of July remember?
Dad: Why?
Me: I was long USDJPY and the pair ran out of momentum in July so i sold and i also sold stocks.
Dad: Why did you sell stocks?
Me: Because if the yen strengthened against the dollar it would be bad for stocks because the yen is negatively correlated to stocks.
Dad: My head hurts.

[Lady Bathory]

Why i think China will devalue the RMB again: Looking at the movement of other currencies against the dollar over the past 12 months the RMB is an outlier. The RMB fell only 2% compared to other currencies that have fallen 10-30%. Despite the recent devaluation the RMB is still overvalued and there's strong pressure to depreciate. If the RMB was to join other currencies it would have to fall at least 10%. For now China is maintaining USDCNY at around 6.4 and it's costing China billions of dollars to maintain the peg. China's Currency Stash Drops byÂ*$94 BillionÂ*After Devaluation - Bloomberg Business so even with 3.5+ trillion dollars of reserves maintaining the peg is unsustainable. China isn't going to spend all its reserves defending the RMB. At some point China will have to let the RMB fall.

[badkuk]

Why i think China will devalue the RMB again: Looking at the movement of other currencies against the dollar over the past 12 months the RMB is an outlier. The RMB fell only 2% compared to other currencies that have fallen 10-30%. Despite the recent devaluation the RMB is still overvalued and there's strong pressure to depreciate. If the RMB was to join other currencies it would have to fall at least 10%. For now China is maintaining USDCNY at around 6.4 and it's costing China billions of dollars to maintain the peg. China's Currency Stash Drops byÂ*$94 BillionÂ*After Devaluation - Bloomberg Business so even with 3.5+ trillion dollars of reserves maintaining the peg is unsustainable. China isn't going to spend all its reserves defending the RMB. At some point China will have to let the RMB fall.

...but aren't they defending the RMB now?

[Lady Bathory]

Yes China is burning through its reserves defending the RMB which is unsustainable. How long can they keep selling dollars? Even if they have trillions of dollars it's not unlimited. They're not crazy to deplete their reserves. Sooner or later they will have to stop.

[Gumusut_Amige]

USDJPY now below 120.00 on safe haven bid.

At dinner last night...
Dad: Did you get wiped out?
Me: No, Pa, i told you i went 100% cash at the end of July remember?
Dad: Why?
Me: I was long USDJPY and the pair ran out of momentum in July so i sold and i also sold stocks.
Dad: Why did you sell stocks?
Me: Because if the yen strengthened against the dollar it would be bad for stocks because the yen is negatively correlated to stocks.
Dad: My head hurts.

Please expound this further... thought that you'll be holding your yen until sub-100 then sell them. Coz i have a plan to exchange some of my US$ to yen! Let me know if this is the right time. Tia