World economy talk

[c_cube]

^^

i think it will

Sayang! Kala ko happy na ako #ASA


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[uls]

ang kalaban -- foreign funds have returned to emerging markets which is supporting EM currencies

here i'm using EM ETFs to show funds flows



dollar-denominated EM bond ETF




local currency EM bond ETF




dollar-denominated EM sovereign bond ETF




dollar-denominated non-sovereign bond ETF

[uls]

here's one more



local currency EM sovereign bond ETF

[Lady Bathory]

The U.S. dollar will strengthen. The dollar has been pressured by falling U.S. bond yields which was caused by the deceleration in economic activity in the first quarter. The harsh winter slowed down economic activity across the U.S. Now that the weather has improved economic activity is expected to accelerate which should support bond yields and the dollar. At the same time the dollar will benefit from the dovish bias of other central banks.

[uls]

^^

don't you ever start your day before noon?

[Lady Bathory]

sometimes haha


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[uls]

ang kalaban -- foreign funds have returned to emerging markets which is supporting EM currencies

here i'm using EM ETFs to show funds flows

fund flows not funds flows

failed to edit that

OC

[uls]

US retail sales rose only 0.1% in April (+0.4% expected)

that's the problem with the US economy -- weak demand

that is why the Fed is concerned about high unemployment -- you cannot have strong demand when too many people aren't working

and that is why the Fed cannot raise rates yet

[Monseratto]

Hmm.. Not only Chinese but alsoTaiwanese, Japanese, Korean and Singaporean factories. There are reports they were attacking anything with Chinese character... Hope those countries will now think twice for putting their businesses there and move elsewhere.

Anyone who looks oriental may want to avoid taking a vacation in Ho Chi Mihn for now.

Anti-China Protesters in Vietnam Damage Taiwanese Businesses - Bloomberg

Anti-China Protesters in Vietnam Damage Taiwanese Businesses
By Bloomberg News May 14, 2014 5:04 PM GMT+0800

Anti-China rallies sparked by the placement of an oil rig in waters near Vietnam damaged factories owned by Taiwanese companies, with some plants closing as Vietnam detained hundreds of protesters.

Vietnam’s government has called for the removal of the Chinese exploration rig from waters near the contested Paracel Islands, with Prime Minister Nguyen Tan Dung describing China’s move as “extremely dangerous.”

Taiwanese companies with factories in Vietnam halted operations, with some citing damage to plants from the protests. One person was slightly injured and more than 200 Taiwanese people took refuge at a hotel in the southern province of Binh Duong, according to Chen Bor-show, director general of the Taipei Economic and Culture Office in Ho Chi Minh City.

“The workers are not choosing from which country the factory belongs,” said Bob Hsu, general manager of Taiwan’s Great Super Enterprise Ltd., which has closed its garment factories in the southern province of Dong Nai. Protesters looking at company names “are just trying to find a Chinese word. It includes Korean, Japanese factories.”

“I asked the local police to protect my workers,” Hsu said today in Ho Chi Minh City. “We moved staff outside. I am worried, so we are destroying any Chinese words in the logo.”

Operations Halted

Formosa Chemicals & Fibre Corp. (1326)’s Vietnam unit halted operations and is assessing damages, the company said in a statement to the Taiwan Stock Exchange. Kenda Rubber Industrial Co. (2106), Headway Advanced Materials Inc. (1776), Sanitar Co. Ltd. (1817), Advanced International Multitech Co. (8938), Tainan Spinning Co. (1440) and Yung Chi Paint & Varnish Manufacturing Co. (1726) were among those announcing temporary closures.

Advanced International said its plant suffered damage and items were stolen yesterday after an anti-China demonstration. Formosa Taffeta Co. (1434) said the office building and computers of its Vietnam unit were damaged by intruders yesterday.

Among stocks affected by the protests in Vietnam, Sanitar Co. lost 5 percent to NT$32.40 and Tainan Spinning fell 2.8 percent to NT$19.35 today. Taiwan’s benchmark Taiex Index (TWSE) rose 0.7 percent.

Police are holding almost 500 people for questioning over the damage to property in Binh Duong, according to Mai Cong Danh, deputy chief of the province’s police. The situation is stabilizing, he said today by phone.

Protesters targeted the Vietnam-Singapore Industrial Park and other factory parks in Binh Duong yesterday, “specifically manufacturing companies that are owned and/or managed by Chinese as well as Chinese expatriates working for other companies,” the industrial park said in an e-mailed statement.

Singapore Concerns

“During the night the protesters set fire to three factories,” it said in the statement. “There are no reported casualties. The local police are on site and have taken over security of both industrial parks.” About five companies’ factories were damaged by fire, according to Danh from Binh Duong police.

Singapore called in Vietnam’s ambassador to the country to voice concerns over the protests, according to a statement from the foreign ministry.

“Singapore views this issue very seriously given our close economic cooperation with Vietnam,” the ministry said in the statement. The government has “requested the relevant Vietnamese authorities to restore order urgently.”

Taiwan condemned the violence, according to a statement on the website of Taiwan’s Ministry of Foreign Affairs. The ministry urged Vietnamese to restrain from “irrational acts” and asked the government to protect people’s safety and property.

Companies Vandalized

Hundreds of companies in Binh Duong were vandalized during demonstrations yesterday, with Chinese, Taiwanese and South Korean-owned plants affected, online news service VnExpress reported. The VnExpress report included a photo a South Korean flag being draped over the Chinese characters on the sign of a company outside a factory in Binh Duong.

China and Taiwan have been separately governed since 1949, when China’s Nationalist government fled to the island during a civil war against Communist forces. China still claims Taiwan as part of its territory, and Taiwan’s official name is the Republic of China.

Last year Vietnam exports to Taiwan were $2.2 billion, according to Vietnam government data, while Taiwan exports to Vietnam were $9.4 billion. Taiwanese companies were early investors in Vietnam, Raymond Wu, a business consultant in Taipei, said today by phone.

Mira Hotel

Unless attacks on Taiwanese companies subside soon “there will be lasting consequences,” Wu said. “This is a big surprise. We hope this is something of an isolated incident and will not cause permanent damage to the investment confidence of not only Taiwanese investors but investors from other countries.”

More than 200 Taiwanese people took shelter at the Mira Hotel in Thu Dau Mot, according to Chen from the Taipei Economic and Culture Office. There are more then 1,000 Taiwanese companies in nearby areas, Chen said, and airlines are putting on larger planes to bring nationals back to Taiwan.

China is taking action to protect its citizens in Vietnam, Foreign Ministry spokeswoman Hua Chunying said today in Beijing.

“We urge the Vietnamese side to immediately take necessary steps to stop these activities and seriously punish crimes to ensure the security of Chinese citizens and institutions in Vietnam,” Hua said.

‘Any Factory’

The U.S. Consulate-General in Ho Chi Minh City sent a statement to its citizens warning about demonstrations “aimed at Chinese-affiliated companies and factories in and around Ho Chi Minh City and Binh Duong province.” The Chinese embassy in Vietnam posted a statement on its website urging workers to avoid unnecessary outdoor activities.

“There’s a lot of concern about it,” said Nate Herman, the Arlington, Virginia-based vice president of international trade for the American Apparel & Footwear Association, in an interview today during a visit to Ho Chi Minh City.

“It seems to be an issue where protesters are targeting any factory they think is Chinese-owned, and maybe because of a lack of understanding they seem to also be targeting Taiwanese and Korean-owned factories,” Herman said. “It just seems to be a nationalistic issue where people are taking out their frustration with China against anything that resembles Chinese.”

U.S. State Department spokeswoman Jen Psaki said on May 8 that China had engaged in “dangerous conduct and intimidation” over the rig. Hua from China’s Foreign Ministry said last week the U.S. should stop irresponsible comments that encouraged some countries to take provocative maritime actions.

Vietnam and China fought a border war in 1979, with ties normalized in 1991. Vietnamese history over the last two thousand years has been characterized by Chinese incursions into what is now Vietnam’s territory, and streets in cities are regularly named after heroes from those conflicts.

[uls]

just when i thought yields are heading higher...






the bond market doesnt see growth

[Monseratto]

Anti-Chinese riots in Vietnam escalating. Deaths reported and Chinese citizens streaming out the country. China clamps down on news reports regarding the rioting. I guess the PRC learned it's lesson during Anti-Japanese rioting...

Anti-China riots turn deadly in Vietnam
Reports of 20 or more killed as Beijing's expansionism in South China Sea provoke continued violent backlash in Vietnam

Jonathan Kaiman in Beijing and agencies
theguardian.com, Thursday 15 May 2014 07.16 BST

iolent reaction in Vietnam to China's assertive stance in disputed seas has turned deadly with reports that 20 or more people have been killed during rioting that began with attacks on foreign-owned factories.

A top Taiwanese diplomat said rioters had stormed a large Taiwanese steel mill in Vietnam, killing at least one Chinese worker and injuring 90 more. Huang Chih-peng said the violence took place late on Wednesday and early Thursday at the Formosa steel mill in central Vietnam.

A doctor at a hospital in the central Vietnamese province of Ha Tinh said five Vietnamese workers and 16 other people described as Chinese died during anti-China rioting on Wednesday night.

"There were about a hundred people sent to the hospital last night. Many were Chinese. More are being sent to the hospital this morning," the doctor told the Reuters news agency by phone.

Cambodia said hundreds of Chinese nationals had poured across the border from Vietnam to escape the riots. "Yesterday more than 600 Chinese people from Vietnam crossed at Bavet international checkpoint into Cambodia," Kirt Chantharith, a police spokesman, told the Reuters news agency. Bavet is on a highway stretching from Ho Chi Minh City, Vietnam's commercial centre, to Cambodia's capital, Phnom Penh.

Earlier this week mobs burned and looted scores of foreign-owned factories in southern Vietnam, believing they were Chinese-run when many were actually Taiwanese or South Korean. No deaths were reported in those initial attacks.

Anti-Chinese sentiment has been running high in Vietnam ever since Beijing deployed an oil rig into disputed waters in the South China Sea on 1 May. There have been encounters including ramming and exchanges of water cannon between Chinese vessels operating near the rig and boats from Vietnam, which wants China out of the area.

China’s foreign minister, Wang Yi, “urged Vietnam not to attempt to further complicate and aggravate the current maritime friction”, the state-run Global Times newspaper reported on Thursday.

"China's position on safeguarding its legitimate sovereign rights and interests is firm and clear and will not change," he told Indonesia’s foreign affairs minister Marty Natalegawa in a phone conversation, the Global Times said.

The newspaper condemned the protests in an editorial, calling them “the most stunning attack [on] foreign businesses in East Asia in recent years”.

“The turmoil is the outcome of Hanoi's years of anti-China propaganda,” it said. “Without legitimate grounds and practical capability, Vietnam fabricates and hypes up its jurisdiction over the Xisha and Nansha islands. This uncompromising stance, in an attempt to bring its people together, has actually cornered itself.”

In 2012 Chinese authorities permitted large-scale anti-Japan protests amid rising tensions between the two countries over competing territorial claims in the East China Sea. Protesters in cities across the country vandalised Japanese shops and smashed Japanese-made cars before authorities ordered them to disperse.

China’s propaganda authorities are censoring coverage of the protests, according to a leaked circular obtained by the online magazine China Digital Times. “Absolutely do not report on any news related to ‘Chinese-funded enterprises in Vietnam being attacked by Vietnamese,’” it said. “Do not republish foreign coverage.”

[Lady Bathory]

Bond investors do not see strong growth. They do not see inflation. Wage growth is needed to fuel inflation but wages are stagnant. Bond yields are falling because inflation expectations are low. For bond yields to rise you need a few months of data that shows inflation is rising which should boost inflation expectations.


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[uls]

speaking of inflation...

April US CPI 2.0% vs 2.0% exp y/y. Prior 1.5%
0.3% vs 0.3% exp m/m. Prior 0.2%
Core 1.8% vs 1.7% exp y/y. Prior 1.7%
0.2% vs 0.1% exp m/m. Prior 0.2%

rising

even core is rising

[uls]

[uls]

Bond investors do not see strong growth. They do not see inflation. Wage growth is needed to fuel inflation but wages are stagnant. Bond yields are falling because inflation expectations are low. For bond yields to rise you need a few months of data that shows inflation is rising which should boost inflation expectations.


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Bond yields are falling coz bond bears are forced to unwind short positions

all that buying is driving up prices / driving down yields

[Lady Bathory]

Those shorts are going to be flushed out and yields will stablize.


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[uls]

dollar index hovering a bit above 80


US 10Y yield stabilizes for now

[uls]

slow start to the week

Fed minutes on Wednesday

expect the usual -- low rates for an extended period to fix unemployment

[uls]

has anyone checked the price of Brent crude?

this is what traders call "geopolitical risk premium"

In Libya, fighting sweeps across Tripoli following Behghazi violence - CNN.com

Tripoli, Libya (CNN) -- Fierce fighting swept across the Libyan capital of Tripoli on Sunday, a short time after armed men stormed the country's interim parliament. The violence appeared to be some of the worst since the 2011 revolution that ousted longtime leader Moammar Gadhafi.

At least two people were killed and 66 were injured, according to the Health Ministry.

[uls]

another slow day

the only mover: