China & HK Archives - Page 58 of 60

September 27, 2011

Iron forward market softens – Phat Dragon | Westpac

The iron ore market is beginning to exhibit some signs of modest
unease, with 3mth forwards giving up significant ground while spot
has moved about 5% lower. From an export profitability perspective,
falls in the Australian dollar and Brazilian real have more than
covered the US dollar spot decline. Even so, to Phat Dragon’s eye
a cyclical correction in the ferrous metals sphere appears to be
underway and price expectations should be ratcheting downwards.

Excerpt from Westpac’s Phat Dragon weekly chronicle of the Chinese economy

September 22, 2011

China manufacturing data paint weak picture – MarketWatch

HSBC’s preliminary China Manufacturing Purchasing Managers’ Index, or “flash” PMI, fell to a two-month low in September, indicating a broadening slowdown in the Chinese economy, with industrial output swinging from a modest expansion to a deterioration.

via China manufacturing data paint weak picture – Economic Report – MarketWatch.

September 22, 2011

China’s Big Four banks reportedly see big outflows – MarketWatch

China’s four biggest banks are seeing a big outflow of deposits…….. a large portion of the CNY420 billion of deposits may have flowed to the high-yielding private lending markets, which have grown rapidly in recent months due to the strong borrowing demand from small businesses…….Borrowing rates in the private lending markets are typically 10 times the benchmark deposit rates, the report said. China’s one-year benchmark deposit rate stands at 3.5% now.

via China’s Big Four banks reportedly see big outflows – MarketWatch.

…A sign that monetary tightening is starting to bite.

September 21, 2011

Beijing warned on foreign investment – FT.com

China’s refusal to open its economy to foreign investment could backfire by encouraging European politicians to curb Chinese investments on the continent, the European Union’s trade chief has warned.

via Beijing warned on foreign investment – FT.com.

September 20, 2011

IMF slashes Australian growth – macrobusiness.com.au

In short, the West must stimulate with a credible longer term deficit reduction plan, the East must dump its mercantilism and banks must be reigned in everywhere. All eminently sane — and the opposite of what’s happening.

via IMF slashes Australian growth – macrobusiness.com.au

September 19, 2011

China to ‘liquidate’ US Treasuries, not dollars – Ambrose Evans-Pritchard

A key rate setter-for China’s central bank let slip – or was it a slip? – that Beijing aims to run down its portfolio of US debt as soon as safely possible.

“The incremental parts of our of our foreign reserve holdings should be invested in physical assets,” said Li Daokui at the World Economic Forum in the very rainy city of Dalian….”We would like to buy stakes in Boeing, Intel, and Apple, and maybe we should invest in these types of companies in a proactive way.”

via China to ‘liquidate’ US Treasuries, not dollars – Telegraph Blogs.

Why would a poor country with GDP per capita of $4000 and an emerging economy be investing in US Treasurys or blue chip stocks? Perhaps because repatriating funds would cause the yuan to rise to a more realistic level against the dollar and end China’s trade advantage.

September 19, 2011

HongKong sell-off accelerates

Dow Jones HongKong Index reversed below 400, warning of another down-swing. The secondary trendline and declining 63-day Momentum indicate that the sell-off is accelerating.

Dow Jones HongKong Index

* Target calculation: 400 – ( 450 – 400 ) = 350

Weekly chart of the Shanghai Composite Index shows a primary down-swing to test support at 2300*. Reversal of 13-week Twiggs Money Flow below zero would warn of rising selling pressure. Failure of support would test the 2008 low of 1700.

Shanghai Composite Index

* Target calculation: 2650 – ( 3000 – 2650 ) = 2300

The sell-off in Asian markets will impact on others with a strong mining sector: Australia, Brazil, South Africa and Canada.

September 13, 2011

Europe Is Urged to Take Bolder Action on Debt – NYTimes.com

“China is a poor country with only $4,000 per capita income,” Yu Yongding, a Chinese top economist and former member of the central bank’s monetary policy committee said in an interview in China. “To talk and think about China to rescue countries with $40,000 per capita incomes is ridiculous.”

China is ready to help, Mr. Yu said, “but European countries first should show that they have a clear road map and convincing policies to preserve the euro and solve their problems as well as the political will to make necessary sacrifices.”

via Europe Is Urged to Take Bolder Action on Debt – NYTimes.com.

September 13, 2011

China’s Lessons From Mexico and Japan – WSJ.com

China might have more to worry about. Wages in the low-skill manufacturing sector are rising fast. On their current trajectory, they will double in the next five years. Low-skill jobs have already started to migrate elsewhere and will continue to do so. Public spending on education, at 3% of GDP in 2009, compares unfavorably to an average of 5% in the grouping of upper-middle-income countries to which China aspires. Reform of the financial system has fallen by the wayside as banks continue to funnel savings to low-yielding state-sponsored projects.

via Heard on the Street: China’s Lessons From Mexico and Japan – WSJ.com.

September 5, 2011

Shanghai confirms bear market

Dow Jones Shanghai Index breached support at 320, confirming the earlier signal at failure of 330. Reversal of 13-week Twiggs Money Flow below zero warns of rising selling pressure.

Dow Jones Shanghai Index

* Target calculation: 330 – ( 390 – 330 ) = 270