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Sunday, June 9, 2013

Your forexlive.com ENewsletter

Link to ForexLive

Australia press stoking political leadership tensions

Posted: 09 Jun 2013 01:49 AM PDT

If you’re interested in Aussie federal politics (rudely interrupting perfectly good football seasons), leadership speculation against the PM is being stoked in the press:

Julia Gillard backers wobble in support (gated – try a search on the headline, or wait for tomorrows fish-n-chips)

and

Rudd is Labor’s best last hope

 

China May fiscal revenues +6.2 pct y/y, expenditure grew 12.0 percent

Posted: 09 Jun 2013 01:03 AM PDT

  • China May fiscal revenues +6.2% y/y (1.27 trillion yuan ($207 billion))
  • Expenditure grew 12.0% (to 1.03 trillion yuan)
  • surplus of 248 billion yuan

The ministry attributed the slower growth in revenues so far this year to slowing economic expansion, tax cuts, falling producer prices, weaker import increase as well as the base effect

More at Sharenet.co.za

 

Reuters: Japan PM Abe unveils plan for tax cuts to boost capex

Posted: 09 Jun 2013 12:58 AM PDT

  • Japanese Prime Minister Shinzo Abe said on Sunday the government would decide on tax cuts in autumn, when parliament reconvenes after an upper house election on July 21

“We’d like to decide on bold tax cuts for capital expenditure in autumn,” Abe told public broadcaster NHK.

Japan PM Abe unveils plan for tax cuts to boost capex

North and South Korea hold first official talks for more than two years

Posted: 09 Jun 2013 12:26 AM PDT

  • The two fractious siblings met in Panmunjom
  • Scheduled further talks for Wednesday

Rival Koreas hold first talks in two years

 

China inflation, lending recap

Posted: 09 Jun 2013 12:15 AM PDT

From Reuters:

China’s annual consumer inflation slowed in May while growth in bank lending fell below expectations, data showed on Sunday, piling up more evidence that the world’s second-largest economy could slow further in the current quarter.

  • PPI data showed very weak demand
  • Adding to the evidence of a slowdown was data showing that Chinese banks lent 667.4 billion yuan ($109 billion) in new local currency loans in May, below market expectations

And:

 subdued inflation will enable China to keep an easy monetary stance and some see the possibility that the People’s Bank of China could cut rates later this year

-

Also, from Bloomberg

Policy makers are seeking to keep the inflation rate within about 3.5 percent this year, down from a 4 percent goal last year. Price gains have been below target this year as food-price gains moderated.
Producer prices have now dropped for 15 months in a row, the longest stretch of declines since 2001-2002, reflecting overcapacity in industries including steel and cement and softer domestic demand.

-

Reuters and Bloomberg both drawing similar conclusions as to the weakness of this data.

Reuters: China May vehicle sales up 9.8 pct y/y-industry group

Posted: 09 Jun 2013 12:08 AM PDT

  • Vehicle sales in China up 9.8 % in May y/y
  • Compares to +13.4% y/y for April

Reuters

And still more Chinese data: Industrial production, investment and retail sales

Posted: 09 Jun 2013 12:03 AM PDT

I think they may have thought they’d released enough weak data this weekend, and have saved the best ’til last. This lot all on, or close to, expectations:

  • Industrial Production YTD y/y for May, 9.4% (expected 9.4% 9.4%)
  • Industrial Production y/y for May, 9.2% (expected 9.4%, prior 9.3%)
  • Fixed Assets Inv Excl. Rural YTD y/y for May, 20.4% (expected 20.5%, prior 20.6%)
  • Retail Sales YTD  y/y for May, 12.6% (expected  12.6%, prior 12.5% )
  • Retail Sales y/y for May, 12.9% (expected 12.9%, prior 12.8%)

And still more Chinese data released now – money supply and new loans

Posted: 08 Jun 2013 07:05 PM PDT

  • New Yuan Loans for May, 667.4B (expected 815.0B, prior 792.9B)
  • Money Supply M0 y/y for May, 10.8% (expected 11.0%, prior 10.8%)
  • Money Supply M1 y/y for May, 11.3% (expected 11.9%, prior 11.9%)
  • Money Supply M2 y/y for May, 15.8% (expected 15.9%, prior 16.1%)
  • Aggregate Financing for May, 1190.0B (expected 1600.0B, prior 1750.0B)

New loans down quite a bit on previous and also on expectations. Again indicative of slower times in China and not a positive input for AUD.

-

And a note – thats it from me for a few hours, I’m off for some weekend!

China CPI and PPI out now

Posted: 08 Jun 2013 07:00 PM PDT

  • Consumer Price Index y/y for May, 2.1% (expected 2.5%, prior 2.4%)
  • Producer Price Index y/y for May, -2.9% (expected -2.5%, prior -2.6%)

Lower than expected inflation at both the consumer and producer levels. Does this give ‘scope’ for stimulus?

(Thanks to Geppy in the comments for the heads-up)

Hedge fund foundation pledges £500m-plus to fight malnutrition

Posted: 08 Jun 2013 06:33 PM PDT

  • A foundation funded by a London hedge fund has donated $787m (£517m) to tackle children's malnutrition
  • The donation by the Children's Investment Fund Foundation (CIFF) is funded by the profits of Chris Hohn's hedge fund TCI

This sounds interesting: “The foundation … has been credited with revolutionising charitable work by applying hedge fund-style performance targets to projects.”

More: Hedge fund foundation pledges £500m-plus to fight malnutrition

German court case could force euro exit, warns key judge

Posted: 08 Jun 2013 06:29 PM PDT

Article from Ambrose Evans-Pritchard in the UK Telegraph, gleefully (or so it seems) extrapolating to the worst case scenario on the court case on the legality of the European Monetary Union rescue machinery, saying it could provoke a showdown between Germany and the European Central Bank (ECB) and ultimately cause the collapse of monetary union.

German court case could force euro exit, warns key judge

Enjoy!

Article on Steve Cohen and SAC

Posted: 08 Jun 2013 06:20 PM PDT

There’s been plenty written about Steve Cohen and the investigation of his hedge fund, SAC.

The trading floor of the fund is located in Connecticut, this article is from the local press there. It details much of Cohen’s philanthropic work:

Steven Cohen: His own private bravado

Survey shows UK manufacturers turning away from borrowing to expand

Posted: 08 Jun 2013 06:09 PM PDT

Nearly 52 percent of companies polled by manufacturers’ organisation EEF for its quarterly Credit Conditions Survey said they had no need to borrow to support their business, a record high.

  • the balance of companies who said the cost of credit was rising rather than falling sank to 2 percent, the lowest since the survey began in 2007
  • “This is a result mirrored by other surveys and will surely slow investment.”

Reuters

I guess another argument for all this global slashing of rates and QE being so much ‘pushing on a string’

 

Japan press: Frustration with ‘Abenomics’ starts to build among LDP lawmakers

Posted: 08 Jun 2013 05:54 PM PDT

Some cracks in the ruling party LDP are starting to appear publicly:

  • Hitoshi Kiuchi, a Lower House LDP lawmaker, told a joint meeting with the government Friday that falling stock prices "shows the market expects little (of Abenomics)”
  • Kozo Yamamoto, another LDP member of the House of Representatives, said raising the consumption tax to 8 percent from the current 5 percent ( scheduled for next April) "is the biggest risk for Abenomics"

Japan Times

Weekend quickie – Becoming a Superstar: It’s Not All About Practice 10,000 hours may not be enough

Posted: 08 Jun 2013 05:31 PM PDT

A quick article for the weekend:

They say that … 10,000 hours of deliberate practice is necessary to obtain elite performance levels in activities ranging from golf to chess to music. .. the 10,000 hour rule reflects the idea that becoming a world-class athlete or performer rests on a long period of hard work rather than "innate ability" or talent. You don't need to be born with the "right" genes to be a super sta,… you just have to practice in the "right" way.
Is it true?

The article discusses the recent research that shows “pretty compelling evidence that there is more to expert performance than practice… (and) … factors other than practice are important for determining who is going to obtain the highest level of skill”

Becoming a Superstar: It's Not All About Practice 10,000 hours may not be enough

Abe: I did it my way. And you’ll do it my way too.

Posted: 08 Jun 2013 05:20 PM PDT

Abe channeling Sinatra on Thursday:

Prime Minister Shinzo Abe said his policies are "the only way" to fix the economy,

Abe says his way is 'the only way'

Quote is from Thursday last week. The yen liked it.

I can’t recall the words of the song, but it went something like:

Retracements?

I’ve had a few  … but then again, too shallow to mention …

How to read the gated Wall Street Journal from Hilsenrath on Friday: Fed on Track to Ease Up on Bond Buying Later

Posted: 08 Jun 2013 05:16 PM PDT

Friday’s article in the Wall Street Journal highlighted by Ryan’s post from Friday (Hilsenrath still sees fed tapering later this year) is gated, but I’ve tracked down a non-gated full version here: WSJ’s Hilsenrath: Fed Likely on Track To Reduce Bond Buying Later This Year

Federal Reserve officials are likely to signal at their June policy meeting that they’re on track to begin pulling back their $85-billion-per-month bond-buying program later this year, as long as the economy doesn’t disappoint.

Hilsenrath: Why the Fed Hates the Word ‘Tapering’

Posted: 08 Jun 2013 05:10 PM PDT

A bit of weekend catch-up.

Fed ‘mouthpiece’ Jon Hilsenrath has a (non-gated) Wall Street Journal article about why the Fed would prefer not to use the term ‘tapering’:

The hangup for Fed officials is the word "tapering" suggests a slow, steady and predictable reduction from the current level of $85 billion a month at a succession of Fed meetings, say to $65 billion per month, then to $45 billion and so on. And that's not necessarily what Fed officials envision.

More

This isn’t the first time Hilsenrath has sought to promote the idea that ‘tapering’ will not be used and it will be much more of a stop-start process, responnsive to changes in the data: Jon Hilsenrath says to expect less of the idea of 'tapering ' from now on

GBPAUD: Let battle commence

Posted: 08 Jun 2013 08:48 AM PDT

The ICC Champions Trophy may simply be the warm up act for The Ashes this summer but any England/Australia sporting contest is to be eagerly greeted.

Australia are currently 90-2  103-3 from 28 chasing England’s 269-6 from their 50 overs

If you’re not near a tv screen you can follow today’s action here courtesy of the Beeb

eng aus icc june 8

Meanwhile I’m heading back out to enjoy the rare  sunshine.

Enjoy your week-end one and all

Imagine if the UK had joined the Eurozone

Posted: 08 Jun 2013 08:33 AM PDT

With the clamour building in the UK for an in-out referendum on the EU here’s respected Telegraph writer Jeremy Warner’s take on what might have happened if Britain had joined the euro.

He argues that former PM Gordon Brown’s five golden rules whilst chancellor saved the UK from tripping headfirst into the euro mire.

A little “what if” reading for the week-end


at 5:04 PM

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