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’Chinese CNH – YOURS!
Something is happening in China.
That’s the ominous title of an FX note posted by George Saravelos of Deutsche Bank on Friday morning.
It seems something is up in the big emerging market arbitrage window of the sky known as the onshore/offshore Chinese currency market.
China to Europe: that’s a sure nice EFSF you have there
The EFSF roadshow is in Asia trying to drum up interest in the newly leveraged, newly insured, revamped fund. The Chinese are counting their chips and considering whether to double down on their European bet.
How China’s currency system is like a giant ETF
As FT Alphaville has written before, China effectively manages four different price paths for its currency, the renminbi.
Critical for its future flexibility, however, is the exchange between the so-called offshore CNH and the onshore CNY market.
China’s copper collateral – and covert credit
Whatever happened to China’s amazing copper collateral shenanigans?
Goldman Sachs said last month that China’s central bank may have cracked-down on the scheme, which saw Chinese corporates use copper as collateral for new loans.
The (possible) future of US manufacturing
Even as it was becoming clear that first-quarter growth had decelerated, there were plenty of signs that the manufacturing sector remained an exception.
Factory production in the first three months of the year grew by 9.1 per cent (annualised),
Throwing in the towel, renminbi edition
Lots of rubber-necking on the Uncle Sam-deficit section of global imbalances this week, not so much on the China-surplus side.
Let us correct that injustice.
From Stephen Gallo of Schneider FX on Tuesday:
Further further reading
For the commute home, where your wealth funds are always sovereign,
- A quick who’s who in Yemen.
- Bernanke to start doing quarterly press conferences.
- Surprise! SWFs help prop up autocrats.
Offshore adventures in Chinese property
With bank credit being tightened across the country it seems clear that China’s property developers increasingly desire to fund via the bond markets.
Some, though, have been increasing bond sales more than others.
Richard Koo goes unconventional on China
Nomura’s Richard Koo — he of ‘balance sheet recession’ fame — has been inspired.
He’s spent a week with Chi Hung Kwan, of the Nomura Institute of Capital Markets Research and an all-around China expert,
China’s yuan-child policy
Surely it was hard enough being a Chinese man without being held responsible for a global currency war.
This is, roughly, the usual US-China currency war logic: (1) Chinese officials intervene aggressively in the currency market,
China’s lunar rates rise
Everyone was expecting a China rate rise at some point. But today? Tuesday?
Officials at the People’s Bank of China just announced they’ll increase the one-year yuan lending rate to 6.06 per cent from 5.81 per cent,
The new strongmen of Asia’s looming currency wars
Some intriguing movements are afoot on the currency front in Asia, where the Taiwanese dollar, the Indonesian rupiah and the Korean won have lately been the region’s strongest performers.
It’s all part of a steady intensification of regional inflation jitters — and a looming cycle of back-to-back interest rate increases and possibly,
Chinese plate-smashing
Another day, another high in Chinese money market rates:
That’ll be FT Alphaville’s favourite Chinese interbank benchmark, the seven-day fixed repo rate, posting a record one-day rise of 242bps on Tuesday.
Chinese plate-spinning
And last week’s cash crunch in Chinese interbank markets…
…is still proving difficult to put down.
That’s the seven-day repo rate, off last week’s high following RMB50bn of liquidity added by China’s central bank on Thursday,
What the China risk is
There’s been a bit of (somewhat post hoc?) concern in recent days over the cash crunch in Chinese interbank markets.
The one-week Shanghai Interbank Offered Rate went up, up… and then came down. Same stuff in the seven-day repo rate,
The beast with two backs
We mean the greenback and the redback, naturellement.
USD/CNY will likely be concentrating more than a few minds in 2011, with investors looking for ways to play the reflation trade, and thus, a rebalancing trade,
A cash crunch in China
Newswires are reporting that China’s finance ministry failed to attract enough demand for a bill sale on Friday — the first time this has happened since June.
This is important since the failure could indicate a shortage of cash at banks following the lifting of reserve requirements twice in this month.
A Chinese real-estate supply shock
Standard Chartered’s analysts have been doing a good job of monitoring the Chinese real-estate conundrum — i.e. will prices collapse or will they just keep booming forever?
In a note issued on Thursday,
The other currencies matter too
Econbrowser recently posted an interesting guest article by Willem Thorbecke, a research fellow at the Asian Development Bank Institute.
Thorbecke argues that the US shouldn’t ignore the exchange rates of other East Asian countries as it pressures China to let the RMB appreciate.
Two years n’ Tibet
Tip of the hat to The Browser for this — a paper on Chinese international trade and internal politics that’s both weird and timely.
Here’s the abstract, penned by two University of Goettingen economists (emphasis ours):
Burning through the yuan and asking for more
If you’re a China-based bank you might have received this in your inbox on Thursday — from the Hong Kong Monetary Authority (HKMA):
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(i) “Until further notice, Participating Authorized Institutions
China’s little problem with unspent cash
There’s a bit of an interesting situation developing in Chinese public finance.
According to analysts at Standard Chartered, based on current trends, the government’s revenues could fall short of expenditures by only CNY300-500bn,
China’s sizzlingly (disappointing) growth record
It’s a small indication of the enormous expectations of China these days that Thursday’s announcement of Chinese GDP — 9.6 per cent growth in the third quarter — managed to fuel investor jitters and weigh on some Asian stock markets.
China does a forex whoopsie
From Reuters on Thursday:
Yuan ends up after fixing error raises appreciation view
* China FX system inputs incorrect mid-point before mkt open
* Corrected to 6.6695 from 6.6495 in several minutes
* Pause in yuan appreciation expected over next few days
* Yuan seen resuming rise to around 6.6 by late Nov
* Yuan at 6.6504 vs dollar,
That Chinese rate rise [updated]
The market was a bit confused on Tuesday by the People’s Bank of China’s ‘surprise’ move to raise lending and deposit rates by 25bps this week. Here’s the announcement in Chinese:
Which roughly translates as ‘keep on not calling us a currency manipulator,
Irony alert: China cries fowl
Minyanville has picked up on the irony of the month, following Monday’s news that China, which was the largest importer of US chicken in 2009 ($752.2m), will impose new ‘anti-dumping’ duties on chicken parts and whole birds,
The renminbi’s release is speeding up
Now here’s a renminbi mystery.
Not only did the People’s Bank of China fix the USDCNY cross-rate lower for the eighth time running on Monday at 6.7110, versus Friday’s 6.7172 — the longest run of low fixes since October 2007.
China, Japan and the intervention two-step
At last, a chance for browbeaten Japanese finance ministers and bureaucrats to recover some mojo — and blame someone else for the yen’s seemingly irrepressible rise.
After yet another dismal round of promises by Japanese officials to act to curb the currency,
Yuan-ted: McDonald’s new bond
Two global titans — one of fast food and one of the world economy — have teamed up in the debt market. For, McDonalds has become the first foreign corporate to issue a renminbi-denominated bond.
The Thursday press release from offer manager Standard Chartered: