World economy talk

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boriiiing....

Shanghai

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aside from gold here's another inflation hedge that's getting crushed...

US 10 yr TIPS

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inflation hedge selloff

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SHCOMP

still below 2000



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wealth management products redemption end of the month

banks need lots of cash to pay customers

gonna be interesting to see how that would turn out

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US 10 yr yield retreats


Treasuries Gain Amid Bets Fed Won?t Be Quick to Reduce Stimulus - Bloomberg

Treasuries rose for a second day amid speculation the Federal Reserve won’t be quick to reduce monetary stimulus as Richmond Fed President Jeffrey Lacker said the central bank isn’t close to decreasing its balance sheet.

The 10-year yield dropped six basis points, or 0.06 percentage point, to 2.48 percent at 9:48 a.m. in New York, according to Bloomberg Bond Trader prices. It touched 2.47 percent, the lowest since June 21. The 1.75 percent note due in May 2023 gained 15/32, or $4.69 per $1,000 face amount, to 93 21/32. The yield dropped seven basis points yesterday, the biggest decline since June 13, after touching 2.66 percent on June 24, the highest since August 2011.

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repost ko lang ito from page 756 (6/4/13)

Uls tingin mo ba pababa pa gold?

Magkano tingin mo rock bottom nito bago tumaas ulit?

Sent from my GT-P1000 using Tapatalk 2

me:

$1000?

dunno

the price of gold will keep falling as long as the market thinks the Fed will stop all that money printing

the Fed currently prints $85B a month to buy USG debt and mortgage bonds

that devalues the US dollar so investors used gold as a hedge

if the Fed reduces asset purchases the US dollar will strengthen and there will be less need for hedging

there's an ongoing bet (long USD) the Fed will reduce asset purchases soon coz the US economy is improving

the bet is so popular right now everybody and their grandmother are in it

but what if the jobs report on friday isnt good? the Fed can't reduce asset purchases. those long USD positions will be liquidated and everybody will buy gold

hard to predict dude

gold falls below $1,200

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back to the usual correlation

[Monseratto]

Boom...Bond buying may end this September.

U.S. stocks fell, after the biggest three-day rally since January for the Standard & Poor’s 500 Index, before data on consumer sentiment and business activity as investors weighed statements from Federal Reserve officials.

Fed Governor Jeremy Stein said today the central bank is providing more clarity about how it will wind down its $85 billion in monthly bond buying as unemployment falls toward 7 percent.

If the Fed makes a decision to begin reducing purchases in September, Stein said in New York, “it will give primary weight to the large stock of news that has accumulated since the inception of the program and will not be unduly influenced by whatever data releases arrive in the few weeks before the meeting.”

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dollar index

boom!

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there were lots of Fed speakers this week

Lacker, Stein, Lockhart, Powell. Dudley...

[wowiesy]

Boom...Bond buying may end this September.

Bakit ganoon sila maglabas ng news? Ang hirap intindihin... Parang ang daming pasikot sikot ..

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they've been consistent naman -- reducing of bond purchases will depend on data

it's just that the market has become hypersensitive to Fed words

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China manufacturing slowdown

China HSBC PMI slips to nine-month low of 48.2 in June | Reuters

(Reuters) - China's factory activity shrank for a second straight month in June and reached its lowest in nine months as new orders fell despite price cuts by producers, a private survey showed on Monday, reinforcing signs of economic slowdown in the second quarter.

The HSBC/Markit Purchasing Managers' Index (PMI) for June retreated to 48.2, the lowest level since September 2012 and down from May's final reading of 49.2. It was in line with a preliminary reading of 48.3 released on June 20.

A reading below 50 indicates a contraction of activities while one above shows expansion.

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China official PMI

China June official PMI slips to 50.1; HSBC PMI also falls | South China Morning Post

China’s official purchasing managers’ index (PMI) slipped to 50.1 in June from 50.8 in May, a survey showed on Monday, reinforcing worries about tepid growth in the second quarter.

The PMI reading, published by the National Bureau of Statistics, was slightly stronger than market expectations of 50.0 in a Reuters poll.

A reading above 50 indicates expanding activity while a reading below that level points to a contraction.

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dollar index



going long dollar ahead of US jobs report on friday

the bet --- lower unemployment rate (currently 7.6%) which would allow the Fed to reduce bond purchases which is dollar positive

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China June HSBC services PMI expands modestly, but new order growth slides | Reuters

(Reuters) - Activity in China's services sector was lackluster in June as new orders grew at their weakest pace in more than four years, a survey showed, providing further evidence that the world's second-largest economy was losing momentum.

The HSBC/Markit Purchasing Managers' Index (PMI) for the services industry inched up to 51.3 last month from May's 51.2, after growth in new orders hit a 55-month low and business confidence slumped to depths last seen in late 2005 when records began.

A reading above 50 indicates expansion in business activity, while one below 50 implies contraction.

The services sector accounted for 46 percent of China's economy in 2012, and its tepid growth may worsen investor fears that China's economic cooldown is deepening. Most analysts now expect China's economy to slow further in the second quarter.

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king dollar

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USD/JPY offered in London

FXstreet.com (London) - USD/JPY has been rejected at the European opening hours highs.

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eurocrisis is back

BRUSSELS (Reuters) - A teetering Portuguese government has underlined the threat that the euro zone debt crisis, in hibernation for almost a year, may be about to reawaken.

From Greece to Cyprus, Slovenia to Spain and Italy, and now most pressingly Portugal, where the finance and foreign ministers resigned in the space of two days, a host of problems is stirring after 10 months of relative calm imposed by the European Central Bank.

Portuguese Prime Minister Pedro Passos Coelho told the nation in an address late on Tuesday that he did not accept the foreign minister's resignation and would try to go on governing.

If his government does end up collapsing, as is now more likely, it will raise immediate questions about Lisbon's ability to meet the terms of the 78-billion-euro bailout it agreed with the EU and International Monetary Fund in 2011.