10 hours ago | July 27th, 2014 21:49:45 GMT

China economy: Optimism is premature … Chinese data don’t add Up


Here’s a weekend ‘commentary’ item from ‘MoneyBeat’ in the Wall Street Journal:

  • optimism (on the Chinese economy stabilizing) is premature, and not only because of the perpetual suspicion surrounding the accuracy of China’s statistics
  • China still has to work through tens of millions of square feet of unoccupied apartment space and hundreds of billions of dollars of unused factory capacity, most of it debt-financed
  • Data outside of China are flashing warning signals
  • ” caution for investors who have revived bets on the Australian dollar” … Mitsubishi UFJ economist Brendan Brown points to the Baltic Dry Index of bulk shipping costs for raw materials, which is down 35% from a year earlier and at its lowest level in 18 months. While that in part reflects a glut of shipping capacity left over from the 2008 global crisis, it is also a sign of weak Chinese demand for commodities
  • Says China achieving 7.5% growth while “powering down steel plants and letting copper stockpiles build up” with debt
  • Loans increasing twice as fast as the economy—and those numbers exclude a so-called shadow-banking lending system estimated at more than $5 trillion, or 80% of gross domestic product

There is more at the link, its an ungated article: Chinese Data Don’t Add Up


10 hours ago | July 27th, 2014 21:29:48 GMT

Wall Street Journal opinion piece: Abenomics is doomed if it won’t extend beyond monetary easing


An opinion piece in the Wall Street Journal on the weekend:

Since Abenomics hasn’t included concrete economic reforms, Japan is sliding back into its status quo before Mr. Abe was elected in late 2012.


  • Japan’s economic woes before Mr. Abe were not fundamentally monetary, and they still aren’t
  • Businesses that didn’t see sufficient reason to invest when interest rates were an ultralow 0.1% in 2012 wouldn’t be persuaded by an additional round of quantitative easing
  • Exchange-rate appreciation was not at the core of Japan’s loss of export competitiveness before Mr. Abe came to office

Says it should now be obvious that the monetary component of Abenomics is hardly a panacea, and urges Abe “to offer a more substantive agenda”

More at the link: The End of Japan’s Inflation Affair


11 hours ago | July 27th, 2014 20:57:25 GMT

From now on, British army officers above the rank of captain will be required to be bilingual


From the the Financial Times (gated, but can be read with a free registration):

From October, no officer will be promoted to a sub-unit command – effectively any rank above captain – unless they can speak a foreign language, preferably French or Arabic, senior army officials have told the Financial Times

  • Language training will be available to any officer or soldier

Language made obligatory for senior British officers


Although not mentioned, I’m pretty sure Scottish will count. Not sure about ozztralian.


11 hours ago | July 27th, 2014 20:47:39 GMT

ECB Chief Economist Peter Praet: ECB supports Bundesbank appeal for higher wages in Germany


On Sunday Der Spiegel quoted ECB Chief Economist Peter Praet as saying the European Central Bank supports Germany’s Bundesbank in its appeals for higher wage deals in Germany:

  • Praet was reported to have said that in Germany, where “inflation is low and the labour market is in good shape”, higher earnings increases were appropriate



11 hours ago | July 27th, 2014 20:34:17 GMT

Nikkei reports: Poll shows public support for Abe cabinet slips under 50%


According to the latest Nikkei opinion poll, the approval rating of Prime Minister Shinzo Abe’s cabinet has declined to 48% on growing public skepticism over the expansion of Japan’s military role and nuclear energy policy,

  • dropped 5% from the previous survey
  • Below 50% for the first time since Abe took office in December 2012

More at Nikkei

And more again from Nikkei: Japanese public skeptical of military power expansion


12 hours ago | July 27th, 2014 19:45:24 GMT

Monday morning Forex prices, early indications


Good morning, welcome to the start of the FX week and the beginning of the end… of July.

We should have a Haiku competition.




Or, perhaps not.

But, I digress.

With just the New Zealand market open at this time of the week market liquidity is super thin, be careful out there!

Price guide:

Monday 28 July 2014

Usual caveats apply – it is very illiquid and prices can move sharply on not very much at all.

1 Comment

19 hours ago | July 27th, 2014 12:36:37 GMT

Three banks named in silver market rigging lawsuit


Deutsche Bank, HSBC and Bank of Nova Scotia have been accused of attempting to rig the price of silver, in a lawsuit filed in the US.

The plaintiff alleges that the banks, which set the price of silver each day, abused their position in the market. The auction based system has since been modified.

Deutsche Bank and HSBC have not commented on the filing, while Bank of Nova Scotia told Bloombergs that it would “vigorously defend” itself.

The lawsuit follows similar filings in the gold price-fixing market where earlier this year, Barclays Bank was fined ($44m) by UK regulators after one of its traders was discovered attempting to fix the price of gold. Regulators recently announced plans to change the fixing process which I posted here

The BBC carries this on the latest news


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