Archive for June, 2012
File not found. China’s inflation fell to 3.0% yoy in May 2012
China’s CPI inflation fell to 3.0% yoy and -0.3% in May, below consensus, pointing to further weakness in the economy and debt deflation.
China’s May macro data dump: schedule and market expectation
China will be dumping a whole bunch of macro data over the coming few days. Here is the schedule and what the market is expecting.
Credit Suisse’s Dong Tao: China is in a liquidity trap
Dong Tao’s of Credit Suisse thinks that China is in liquidity trap, because the problem for China for a long time has been that interest rates were too low.
Chart: Tobin’s Q ratio for US Equities
The Tobin’s Q ratio is currently close to unity, but it appears to have some way to go if the past great market bottoms were any guide.
Did PBOC actually RAISE some rates just now?
Taking into account the 10% premium of deposit rates tha Chinese banks can offer, PBOC actually raised deposit rates across most maturities.
CHART: S&P 500 vs. PBOC 1-year lending rate
At the time when the PBOC started cutting interest rates in the previous cycle, stock market still had a long way to FALL.
People’s Bank of China cuts interest rates by 25 basis points
The People’s Bank of China cuts interest rates on both deposits and lending sides by 25 basis points.
Economy, United Kingdom. 7 June, 2012, 19:01
Bank of England MPC maintains interest rate and QE unchanged
The Bank of England maintains interest rate at 0.5% and the size of asset purchase programme at £325 billion.
Chart: food prices fell sharply in May
Food prices in May have falled sharply according to Bloomberg, suggesting that the forthcoming CPI data could come in lower.
Before and after: China’s steel warehouse edition
Steel traders are reduce inventory level as activities slow and bank credit is tight, while steel mills are not stopping the production and inventory build-up.
European Central Bank keeps interest rates unchanged
The European Central Bank keeps interest rates unchanged as expected, although some expected a rate cut.
CLSA gives Europe 10 lessons from Asia
CLSA’s Eric Fishwick and Ines Lam studied what happened in the Asian financial crisis and offered some lessons for Europe.
Stimulus du jour: artificial weather modification
China’s NDRC has approved a project to change the weather artificially in the North-eastern region.
Economy, United States. 6 June, 2012, 13:28
The US TIPS curve is inverted
The US index-linked treasury curve has become inverted in the short-end, pointing to deflation in the near term.
Mission completed: Chinese banks have actually lent RMB800 billion
Chinese banks might have lent out RMB800 billion in May after the final rush to lend in the final week of the month.
Markets, Rates and Bonds. 5 June, 2012, 19:35
Race to the bottom: government bond yields edition
Top quality government bonds like US and German have seen their yields hitting record low after record low.
Chinese banks are finally lending some money in the final week of May
The big 4 Chinese banks have lent a total of RMB253 billion in the full-month of May.
Emerging market central banks’ balance sheets are much larger than the developed world
The sizes of major developed market central banks’ balance sheets pale in comparison to those of the emerging market.
Asia, Financials. 5 June, 2012, 11:31
Chart: Emerging market central banks’ FX reserve accumulation and credit growth
There is some evidence that credit growth is at least partly contributed by the rate of FX reserve accumulation.
China warned banks about steel companies’ credit risks while approving steel projects
China warned banks on the credit risks of lending to steel companies while approval steel plants projects in hope to stimulate the economy.