We've entered the part of the bear market where confusion begins creeping in. Did the Bank of Japan intervene again or was that the market? Are central banks secretly intervening as the did in 2016? True or not, this signals the market now belongs to the central bankers. If the yen rallies, the BoJ rises in stature. If the yen falls, the BoJ has failed. Some bears are now wondering if central banks will destroy them again as in prior bottoming attempts and bulls must now worry that the yen starts trading more like the Thai Baht in 1997 than a G7 currency.
My advice: it's a binary event. Either it happens or not and there's nothing we can do about it. The market is already down a large amount this year so pressing shorts isn't advisable. Conversely, the bounce we have seen since the bounce from 3500 is a good spot for opening new shorts. I am stalking energy again, gold, and looking at individual targets such as DPZ.
USDCNY moved to a new high today and is tracking with the yen. USDCNH is up 1.2 percent, gold failed at resistance, U.S. long bonds are following through on their bounce from last week and Hong Kong cratered 6 percent overnight.
With Chinese yuan pounded and Hong Kong down overnight, iShares MSCI Emerging Markets (EEM) is down more than 3 percent in premarket and below it's long-term support line.
I looked at HKD today because of the wackiness in JPY post BoJ intervention. I noticed a dip right around August 15, which was right as the stock market was peaking. Looking back, two signals were clean, one was false. Interested to see if it signals again.
The cycle bells are ringing in my ears. The yuan was already giving me signs of 2015. Shares of Baofeng exemplified the Mainland China stock bubble in 2015. It has since delisted or acquired, I forget off hand what happened to them. I did a typo when inputting the symbol though, and got another stock (300841) that soared in the 2020 bubble. When I look at AMTD (HKD) I immediately thought of Baofeng in 2015. I'm also thinking: Chinese money. Whether it marks a peak or trough I cannot say, although context says peak to me. Talking about any macro signal from this event. The stock itself is also insanely overvalued.
Reporters and analysts all told readers that AMTD’s stock momentum is unsustainable. The stock’s behavior early on Aug. 1 justifies skepticism.
I’ve covered technology for over 40 years and AMTD is the most incomprehensible set of buzzwords and hype I’ve ever encountered. That doesn’t mean the company can’t succeed. It just means the current price guarantees success when the company has achieved very little.
Update: I was thinking of this manipulation as well: the stock WINS soared in 2016 for no reason. One of several U.S.-listed Chinese companies that similarly soared for no reason.
Below 3740 the rally is all but dead. The setup is similar to June where a shock bump in rates sinks equities.
Long-bonds losing their bid overnight, though not out of the uptrend yet.
Why is the market cursed? Until about mid-June, crude oil and the Nasdaq were inversely correlated. There have been moments where the Nasdaq rallies on energy weakness, but lately the Nasdaq and oil have been positively correlated. That signals that to kill inflation, the market will also have to kill equities. Nasdaq is outperforming the S&P 500 with oil coming down, but it is relative.
There is a way to lower energy prices: abandon the GAE. End the push for global domination and negotiate peacefully with Russia. Markets are far too complacent about the role the war is playing. Here is Cramer claiming we need more war to lower oil prices:
How much of the market believes this inverted logic? How much of the market knows the U.S. would literally run out of weapons and ammunition if it armed Ukraine as he suggests? My hunch is a lot judging from how widespread support for the war seems to be. If the market doesn't understand something as simple as this reality, what are the odds people are properly pricing inflation, deflation, interest rate, economic risk?
Here's the U.S. dollar and Hong Kong dollar cross. HKD is banging at the peg limit, threatening devalution. With CNYJPY at a peak, China will face rising deflationary pressure.
Chinese regulators have been asked to exercise greater caution when it comes to reviewing new overseas spending and investment plans amid concerns among senior leaders that higher US interest rates could spur capital outflows, according to people familiar with the matter.
State-owned companies were similarly told that they should be cautious when spending and investing overseas, said the people who asked not to be named because they’re not authorized to discuss the matter publicly. No specific targets or limitations have been set on such expenditure abroad, they said.
A total disaster was always in the cards. I took abuse from bears for being "bullish" on a bounce here, but I was hopeful for a bounce because that would also be the best path for a healthy bear market. There is a forecaster called David Hunter who predicted a melt-up to 6000 on the S&P 500 before a 1929-syle collapse. He was rightly ribbed for predicting stocks would bounce all this year, but his mistake was his timing of QE. He didn't realize the Fed would have to wait much longer and lower for the S&P 500 to unleash it. Most bears do not want to see another QE melt-up scenario, but I fear that is precisely where the market, central banks and governments are headed. There isn't a lick of sense anywhere in aggregate, only on the fringes with independent analysts and traders. The "whole world has gone mad." Might as well go out there and pick all their pockets.
iShares MSCI Hong Kong (EWH) has slipped below 2008 support again. EWH would need to rally above $23 to recover support. The pattern in $HSBC looks similar to the 2008 top, albeit weaker.
The anti-fugitive amendments escalated. The netizens called for a general strike in the whole territory and a 7-zone rally, and blocked traffic routes and asked the government to respond to the five major demands. The Workers' Union refers to at least nearly 200,000 members responding, and more than 1,000 companies take the initiative to take the leave; bus captains, MTR staff, flight attendants, civil servants, social welfare, education, and medical care. The Government urges the public to keep their jobs and cherish the status of an international financial center. In addition, more than 70 flights will be cancelled today, and the AA will appeal to passengers to confirm the flight first.
"Three strikes" have been brewing for many days. Wu Miner, chairman of the Workers' Union, said that nearly 200,000 members of 95 genres will respond, including security, cleaning, MTR staff, bus captains, flight attendants, etc. More than 20 people from all walks of life participated in more than 10,000 people. There were also more than a thousand employers taking the initiative to take a day off. The momentum was strong. If the government does not respond to the demands, it will not rule out the second or third strike.
More than a thousand companies took the initiative to urge the Hong Kong government to respond
Wu Shiping, a member of the China Social Security Front, said that as of 7:30 last night, there were 20 agencies involved in the strike and 2,397 people, and 42 service units on the 1st holiday. A group of Cathay Pacific staff and at least 200 Hong Kong and Shanghai Airlines staff, including pilots, flight attendants and ground crews, also responded; it was reported that about one-third of the Air Traffic Controllers of the Civil Aviation Department had taken sick leave collectively; the AA pointed out that some people initiated airport employees to participate in the strike. The operation will maintain close communication with the airport business partners and provide contingency measures to maintain smooth operation of the airport.
The Director of the NWFB Trade Union, Mr Lam Kam-chuen, said that it was known that there were car owners involved in the strike but there were no confirmed numbers. It is reported that the reserve drivers will be mobilized to maintain their operation. NWFB Citybus did not respond before the deadline. KMB will closely monitor the situation. Du Guangren, chairman of the Hong Kong Railway Company Staff Association, said that the bus captain and the stationmaster were generally scheduled to work a few weeks ago, making it difficult to take time off in the short term. The MTR said that it closely monitors the situation. It is necessary to flexibly deploy manpower and urge passengers not to obstruct the train doors or other activities that affect train operation.
Medical care is not appropriate or wears black support
Ma Zhongyi, president of the Association of Public Medical Doctors, believes that frontline medical care and clinicians understand that the work is heavy and the strike is not appropriate. As for the personal actions of other grades, they have their freedom. Some colleagues have launched black clothes and black masks to show their support. Xinglin Awakening member Huang Renqi said I know that there are a few frontline medical care responses, and the clothing will also be matched. The Secretary for Food and Health, Mr Chan Chan-chuen, believes that when patients express their demands, they will put the well-being of patients first.
A notice of no objection has been issued in the other districts. In addition to the Tsuen Wan, the public has been given a notice of no objection to the public in respect of the Hong Kong Road. Disneyland staff will also hold a rally in the main gate square, and Disney said it respects employees to express their opinions in different ways.
A government spokesman said that any large-scale strikes and violent conflicts have affected the normal living and economic activities of Hong Kong citizens and caused great damage to law and order, economy, people's livelihood and employment. For the demonstrations that may occur today, the Government urges members of the public not to participate in illegal activities such as road closures and to not interfere with transportation facilities.
Potential circumstances on Monday, 5 August might affect airport operation. The Airport Authority advises passengers to check with their airlines for the latest flight information, and to proceed to the airport only when their seats and flight time have been confirmed. Passenger should pay attention to the latest announcement by airlines, and also check with HKIA’s website or “HKG My Flight” mobile app for latest flight information.
Occams's razor says another protest by airport personnel.
Flight attendants and airport staff have begun a planned 11-hour protest at Hong Kong international airport to call on the government to account for a violent attack on residents by suspected gang members last week.
Hundreds of thousands of pro-democracy demonstrators took to the streets of Hong Kong on Sunday, with some of the marchers defacing a national Chinese emblem in their latest expression of protest against mainland authorities.
After the march reached its designated end point in Hong Kong’s Wan Chai district, thousands continued onward, at various points occupying key government and business districts before departing for the Liaison Office, which represents China’s Communist Party-led central government within the city.
Protesters threw eggs at the building and spray-painted its surrounding surveillance cameras. China’s national emblem, which adorns the front of the Liaison Office, was splattered with black ink.
“(Baoshang) is scaring everybody because they’re not the only one. They’re the one that couldn’t hold it together in the end, but… I’ve been trying… to figure out how many banks there are in China and supposedly there are 134 of these city commercial banks. 134 of which (Baoshang) is one, and all of these guys use wealth management products or borrowed in the inter-bank market to fund local things. Or, they borrowed in the inter-bank market or borrowed in wealth management products to support local asset management companies to hide other banks’ bad loans. I don’t think (Baoshang) is unique and I think the reason the markets are scared is because everybody knows that the emperor has no clothes. There is a lot more than just the one.”
“…The main point is that the People’s Bank had gotten their way and opened on all these things. They liberalized the interest rates, so you got wealth management products… You saw what happened when the capital account opened up and they closed it again. There is no way in the world things like that are going to happen (again) in China in your lifetime, my lifetime, or anybody’s lifetime as long as the Party’s in control. No way…”
There’s been a series of historic marches in Hong Kong, with millions of people taking to the streets to protest against an extradition bill that they think will give China more power over the city. On this episode of Odd Lots, we talk to David Webb, one of Hong Kong’s most unusual and well-known investors. Webb has amassed a fortune by investing in local stocks but he also advocates for change in Hong Kong’s volatile market, where big swings and lackluster corporate governance are often the norm. Here, he talks about how he sees the future of Asia’s biggest financial center in the wake of the protests. He also gives his thoughts on U.S.–China relations.
One section isn't a direct argument, but I think it bears consideration for those who think Hong Kong, China or any other nation have enough reserves:
This issue is analogous to the current debate surrounding the size of the United States Federal Reserve’s balance sheet. The extraordinary measures taken since the financial crisis led to the Fed’s balance sheet expanding to a peak size of $4.7 trillion USD. Beginning in the fall of 2017, the Fed began to reduce the total size of the balance sheet which now stands at $3.9 trillion USD and is forecast to shrink to approximately $3.5 trillion USD. Since 2018, a debate has ensued as to how much the Fed’s balance sheet could actually be run off. Between the USD currency‐in‐circulation and the Basel 3 Liquidity Coverage Ratios (LCRs) that US banks are required to satisfy, the Fed cannot possibly reduce its balance sheet anywhere close to zero. Our own estimate is that the Fed couldn’t go much below $3.5 trillion USD without causing severe interest rate volatility as banks would start to bid for fed funds in ways the Fed would have trouble smoothing out with open market operations. The ensuing economic consequences would be disastrous to a highly levered economy.
Therefore, if you can’t reduce your liabilities, you can’t reduce your assets by definition. The Fed originally said their balance sheet was going to shrink to around $2.5 trillion but they are giving up at $3.5 trillion. It turns out that banks needed more reserves than they realized, and they only learned this through bank surveys. But they also have started to have issues with controlling short term rates (which is why they keep cutting interest on excess reserves (IOER) because the fed funds rate isn't acting as they thought it should).
Most of the world hasn't deleveraged, instead leveraged up with debt to forestall a denouement in the credit markets. Among those who have, many have substituted public debt for private debt. The U.S. is in a relatively strong position vis a vis the rest of the world. The Federal Reserve is among those who deny the decline in reserves impacted financial markets, yet it is still abandoning its balance sheet reduction in contradiction to Chair Yellen stating this would only occur in concert with rate cuts. (Or is the Fed exploiting everyone's bad memory and telegraphing a September rate cut?) For a nation such as China to refuse balance sheet reduction (refuse to exchange renminbi for foreign currency), it is effectively floating the currency. For nation with a hard peg such as Hong Kong, refusing to reduce the balance sheet breaks the peg.
Whatever gets HKMA to intervene also appears to coincide with dips in U.S. financials. When USDHKD is below the limit or HKMA doesn't intervene, there's no pressure/ not enough pressure. I'm focused on USDHKD coming off the limit. I'm not forecasting or using this for a trade, only observation. Hypothesis is financials dip again when HKMA intervenes to lift HKD off the floor.
Hong Kong’s monetary authority has sold HK$1.5 billion (US$191 million) of US dollars in the foreign-exchange market to prop up the local currency’s value against the greenback, the first intervention by the city’s de facto cental bank since August 2018.
The move, undertaken through the “weak-side convertibility undertaking (CU),” was triggered when the local currency touched 7.8500 per dollar, the lower limit of a trading band in place since May 2005. The aggregate balance of Hong Kong’s currency reserve would fall by HK$1.5 billion to HK$74.802 billion after the intervention, the Hong Kong Monetary Authority (HKMA) said in a statement on Saturday.
The local currency weakened to touch the lower limit of the trading band because a decline in banks’ funding demand had led to a drop in interbank rates for Hong Kong dollars, which widened the gap between local-currency and US dollar deposit rates. The gap in overnight rates was between 150 and 200 basis points, while the difference in 1-month rates was at about 150 basis points.
Last year, HKD was in a slow motion crash towards the lower bound of the peg. It got there in late March. China cut its RRR a month later and the U.S. dollar began a broad rally against everything. Emerging markets went down and didn't bottom until six months later.
In the space of maybe six or seven months, everyone goes from huge global boom to maybe some slowing to China is outright contracting. And is still contracting after the full reach of its New Year holiday.
The effects have already been profound; the ECB yesterday singling out weak Chinese demand for it having to unleash a third (absurd) T-LTRO in place of a booming monetary policy exit. The OECD did the same when downgrading its forecasts for the global economy.
So, what is China’s problem? There’s trade wars and record (misleading) Total Social Financing, confusing monetary policies where banks are issuing bonds that are really equities and the central bank is swapping them for bills that are bonds but belonging to the central bank. There does seem to be a confusing mess coming out of Beijing.
...Much more than US GDP or payrolls, Europe’s LTRO’s (naked, or with a T) or Jay Powell’s chicken pause, Chinese demand for foreign commodities and goods more than suggest this thing is just getting started. What it actually might be when all is said and done, we don’t know. But the probability of just bouncing off a small, temporarily annoying global soft patch is very much diminished with China spreading this kind of persisting disorder and distress throughout the rest of the world.
The final piece to the puzzle is yuan depreciation, but I do not expect any while trade negotiations are ongoing unless this turns into a really big deal that allows U.S. tariffs to offset yuan depreciation with no retaliation, something that the U.S. said it wants, but isn't part of any agreed upon points made public.
There's only about 1.2 percent of appreciation left for CNH/EUR before it hits a resistance line that marked peaks in 2016 and 2018. Assuming a reversal, it could come as early as next week given the volatility of EUR/USD.
When CNH/EUR declines because CNH tracks with weaker USD it has been good news for global markets and the global economy. When CNH drops against both EUR and USD, the "double depreciation" that started slowly in April 2018 and all at once in August 2015, it has been bad news. If the U.S. dollar continues to strengthen against the euro, it looks like the yuan is about to weaken. Emerging markets are about to significantly underperform U.S. stocks. Moreover, if the current level of EUR/USD holds and CNH/EUR retraced to its 52-week lows, it would take USDCNY through 7.00. There are many moving parts in currency markets, but if DXY achieves a bullish breakout here, watch out.
China's central bank said on Wednesday that it will issue a total of 20 billion yuan ($2.87 billion) of bills out of Hong Kong next month, its first issuance in the former British colony, the world's biggest offshore yuan clearing center.
The People's Bank of China (PBOC) said it will issue 10 billion yuan in three-month bills and 10 billion yuan in one-year bills in Hong Kong on Nov. 7.
Authorities say the issuance is aimed at expanding the range of yuan-denominated products of high credit rating in Hong Kong and improve the yuan yield curve. The issuance will also help the PBOC manage the yuan's liquidity in the offshore market and guide market expectations.
The onshore yuan ended domestic trading on Tuesday at 6.9613 per dollar, the weakest such close since May 20, 2008. The Chinese currency has lost more than 6.5 percent of its value to the dollar since the beginning of this year.
"While the volume is quite small — 10 billion yuan at the 3-month tenor and 10 billion yuan at the one-year tenor - this clearly signals that China's central bank is very keen to stabilize its currency especially at 7.00 hurdle," said Zhou Hao, senior emerging market economist at Commerzbank in Singapore.
By soaking up yuan funds in Hong Kong, the issuance of PBOC bills can help increase interest rates in the offshore yuan market and the cost of shorting the yuan.
This is the first time that the central bank issued a central bank bill in the offshore market. With the renminbi approaching the key “psychological position”, it has a strong signal meaning of stabilizing the foreign exchange market.
Previously, the central bank has repeatedly stated that it has and will continue to actively adopt macro-prudential policies and other measures to stabilize the foreign exchange market expectations, and is “experienced” and “sufficient tools” in this regard.
...Looking into the future, the industry believes that there may be a time course for the RMB exchange rate to stabilize effectively. However, the direction is clear. With the support of fundamental support and counter-cyclical adjustment, the RMB exchange rate will not be out of control, and it is only time to stabilize. The problem, the market should also take a rational look at the phenomenon of the appreciation and depreciation of the renminbi.
The developers of high-strength relying on funds have increasingly tightened their financing channels. Many small and medium-sized developers have begun to look to overseas capital markets and want to list their companies in Hong Kong for financing. On April 26, the Hong Kong Stock Exchange disclosed the Shanghai Dafa Group’s prospectus. As of February 28, the company had a total land bank area of 1.72 million square meters, including a total saleable floor area of 134,300 square meters. And the total building area available for rent is 68,400 square meters. Business operations include property development and sales, commercial property investment, and operations and property management services.
Dafa Real Estate stated that the revenue mainly comes from the sale of properties. The financial data from 2015 to 2017 showed that the company’s sales revenue was 603 million yuan, 575 million yuan and 4.32 billion yuan respectively. As of the end of 2017, the company's cash and cash equivalents were 377 million yuan. The prospectus mentioned that during the three-year period from 2015 to 2017, the company recorded negative net operating cash flow, and may not be able to obtain sufficient funds (irrespective of bank loans, trust financing, or other arrangements) for land acquisitions on commercially reasonable terms. And in future property development, or simply unable to obtain the necessary funds. Dafa Group stated that the company’s property development projects are generally financed through cash generated from operations, bank loans and trust financing. The company is expected to continue to adopt the above methods and seek other financing opportunities to fund the project.
However, Daihatsu Group also mentioned that the company cannot guarantee that it will have sufficient funds, nor can it guarantee that it can obtain additional financing on reasonable commercial terms, or even fail to obtain additional financing. At present, the company's net operating cash flow is negative, mainly due to the time-consuming property development and the need for large amounts of capital, as well as the company's land acquisition and business expansion. Companies may need to significantly increase external borrowing or obtain other external financing. Dafa Real Estate CEO Liao Lujiang once said that Dafa Real Estate planned to hit 100 billion in 2018, and put forward a goal of achieving 300 billion yuan in five years, as well as project follow-up and profit sharing mechanisms.
In addition, another real estate company, Xinli Real Estate, is also planning to go public in Hong Kong. The data shows that the company's sales in 2017 exceeded 40 billion yuan, and the current value of land reserve was 231.4 billion yuan. On May 31, Midea, a real estate platform owned by Midea Group, submitted a prospectus on HKEx. According to the relevant information disclosed in the prospectus, Midea's main businesses include property development and sales, property management services, and investment in commercial real estate. The listing in Hong Kong is to further expand the scale of the industry, and the company will use the funds for general operations and smart home solutions. According to the financial data of Midea Real Estate, the company’s authorized share capital increased to HK$2 billion and the shares were divided into 2 billion shares at HK$1 each. From 2015 to 2017, U.S. real estate revenue was 8.313 billion yuan, 11.992 billion yuan, and 17.717 billion yuan respectively. According to the company's disclosed balance sheet data, the company's total assets in 2017 were 112.798 billion yuan, the total liabilities were 18.88 billion yuan, and the asset-liability ratio was about 89%. As of March 31, Midea Property has 39 projects in the Yangtze River Delta with a land reserve of 8.4 million square meters. By the end of 2018, it is expected that most of the pre-sale residential development projects will be equipped with smart home solutions. Midea Real Estate stated that the company may enter the assembly industry and the first prefabricated construction plant will be put into operation in Xuzhou by June 2020. Nowadays, under the financial background of deregulation by regulators, the regulation of domestic property market and the tightening of financing have become the consensus of the capital market. The financing costs of housing companies through the issuance of bonds are also rising. People in the financial industry (www.thepaper.cn) said that the future financing of housing companies will become increasingly difficult. This year's financing costs have risen compared to 2017, but even so, many housing companies are still Will rush to. "Now that money is getting harder and harder to get, so housing companies also rely on themselves, either to issue bonds, or to borrow overseas. Already listed companies can also use equity distribution, but the cost of these financing channels is also rising." "Although this is the case, as long as it is still within the scope of the developer's ability, it is possible to get the money." Wind data shows that since May, a total of 16 real estate bonds have been issued, with coupon rates More than 7% have 9. At the same time, real estate companies also have stricter supervision over the issue of bonds in the bond market. Since the end of May, Hopson Development (00754.HK), R&F Properties (02777.HK) and Country Garden (2007.HK)
The Hong Kong Monetary Authority (HKMA) stepped into currency markets on Tuesday, buying HK$1.57 billion ($200.0 million) as its currency hit the weak end of its trading band.
Today's action in the U.S. will only increase the pressure on Wednesday.
Aside from the failed intervention, what stands out is the decline in the momentum indicators (as would be expected since the price can rise past 7.85). The market was stretched in April when the limit was hit. Now we're back at the limit and it's situation normal.
The Hongkong and Shanghai Banking Corporation said it will lift its US dollar deposit interest rate from 0.001 percent to 0.1 percent, the first adjustment since May 21, 2009.
iFeng: 投资者请系好安全带：利率全球普涨的时代正在来临 (Investors should fasten their seat belts: The era of worldwide rising interest rates approaches)
As a matter of fact, HSBC also announced on May 2 that it would raise the Hong Kong dollar fixed deposit rate. The new fund with more than 10,000 yuan will hold a deposit interest rate of 1.35% for 6 months, and the deposit rate for a 12-month deposit will reach 1.6%, but it only applies to specified funds. Integrated financial account, promotion period until the end of June.
Market participants said that they believe that other banks will follow HSBC to raise interest rates. It is expected that the Hong Kong dollar's one-year deposit will be as high as 2% in the future.
Third, the stronger US dollar caused investors to worry that bond issuers will be able to repay debt-denominated bonds. According to EPFR Global, which tracks the trends of funds, investors have withdrawn from emerging market bond funds as of the week of May 2. The billion U.S. dollars in funds was the largest withdrawal scale since the global market sold in early February of this year. It was also the first time in 16 months that a net outflow of funds has occurred for the first time in two weeks.
In the recent three weeks, the US dollar pointed out that the external market has undergone major changes. In addition to the rising interest rates and currency devaluations in the aforementioned countries and regions, emerging markets, stock markets and bond markets are also facing a sell-off.
A Morgan Stanley research report released on May 2 pointed out that the rise of Asian emerging market stocks may have lost its momentum and its profit forecast is overly optimistic.
For China, the increasing linkage of the global financial market has made it difficult for them to remain alone. Many analyses pointed out that in order to cope with the pressure of capital outflow caused by the strengthening of the U.S. dollar and the continued interest rate hike by the Fed, there will be room for China's central bank to use RRR cuts or target downward adjustments. The market interest rate will continue to rise, and the trend of the stock market will become even less bright.
USDHKD eased to 7.8430 at the moment. The dollar stress in the exchange rate may be over, but if so, the stress will migrate to a new target.
SCMP: Higher interest rates after HKMA intervention stoke property and stock worries
For the past three years, even as the HKMA increased its base rate six times in lock step with the US Federal Reserve, local commercial banks have managed to keep lending rates low, thanks to the abundant inflows into the city’s assets.
So much so that some market watchers are worried about the potential impact of higher borrowing costs on the city’s red hot property and equity markets.
The HKMA has used HK$51 billion (US$6.5 billion) of its US$440 billion in foreign reserves over the past week to purchase the local currency, mopping up cash from the banking system, which could finally compel commercial banks to raise rates to be in sync with their US counterparts.
In a press briefing, Hong Kong Monetary Authority Deputy Chief Executive Howard Lee said FX transactions are in line with expectations and sees no unusual HKD shorting activity. As Bloomberg notes, Lee said:
A lot of outflows are arbitrage activities, but probably of asset transfers.
HKD purchases operation is smooth and sound.
HKMA will carefully handle if unusual activity is seen.
HKD interbank rates are slowly increasing and HKMA expects this to continue.
Market confidence is strong on linked exchange system and the HKMA.
Exchange fund bills will be available for bank funding when needed.
Now we'll see if it holds or the arbitrageurs push it right back to the limit.
Index Mark-Ups
-
FEEDAs we move into the final trading day of the week, let’s look at eight
key charts. We begin with the NASDAQ Composite, which has broken down
nicely in ...
Weekly Market Pulse: Situational Awareness
-
Questions, questions, questions. Investors always have lots of questions,
most of them about the future, which makes them very hard impossible to
answer. T...
TPR: Applying The Perennial Strategy
-
Tapestry (TPR) – the maker of Coach and Kate Spade purses for women –
reported 4QFY26 earnings this morning. While the numbers looked good to me,
the marke...
Turning Point Brands (TPB US)
-
Today is Garry Kasparovs birthday. Growing up as a teenager in the early
90s, I remember how the discussion in media went around computers beating
humans...
This is the End and a New Beginning
-
I've been thinking about this for some time.
After 21 years of writing this blog almost daily, I've decided to stop
writing the daily updates on the blog.
...
A Slow Motion Slide
-
We’ve had quite a weird week – Nasdaq kept selling off to the indifference
of the rest of the world. Nasdaq’s correction reached -11% off the ATH,
while ...
The Oil Refinery Crisis Will Worsen This Winter
-
The Oil Refinery Crisis Will Worsen This Winter Tyler Durden Thu,
12/10/2020 - 20:20
*Authored by Julianne Geiger via OilPrice.com,*
It was only to be ex...
The Argentina Siren Song And Where Else It Is Sung
-
I’m back! After an extended leave of absence I’ve decided to start writing
again.
Let’s start with a story familiar to those that read MM in my first ter...
Agriculture Reading Picks
-
As Prairies Get Plowed for Biofuels, Greens Demand EPA Act | Bloomberg A
breakthrough to bring driverless tractors into the mainstream? A startup in
Iowa s...
Hacksaw Ridge
-
WWII American Army Medic Desmond T. Doss, who served during the Battle of
Okinawa, refuses to kill people and becomes […]
The post Hacksaw Ridge appeared...
FINTS EVENING HIGHLIGHTS (15 Jun 2016)
-
China’s total debts amounted to 168.5 trillion yuan ($25.6 trillion) at the
end of 2015, equivalent to 249 percent of gross domestic product, Li Yang
an in...
Responses to readers’ questions, and new forecasts
-
[image: Vietnam account set-up]1. The question is: “I got a good run up in
ISJP and was stopped out yesterday-in at 14.23 in august 2012 and out
yesterday ...
![[Most Recent Quotes from www.kitco.com]](https://lh3.googleusercontent.com/blogger_img_proxy/AEn0k_uR4fzdje74Wf9NFSGpIwMsercdloA5yqtdN0KU2uumpL5zMf-8MLNq27WAMP83r5EH04RD9UsjuBYQSj-n83KC374IHZvbvCGHu2rohRXHqqouYntk-JEPr3Q=s0-d)
