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The Sigificance of China's Surprises This Week

April 12, 2013
Overshadowed by Japan's ambitious monetary policy experiment, the heightened tensions from the Korean peninsula and the nearly 1/3 increase overall cost of the Cypriot adjustment (not to mention the collapse of the Bitcon Bitcoin), China was the source of a three surprises. 
First, Fitch became the first major rating agency to cut  China's…
The Sigificance of China's Surprises This Week The Sigificance of China's Surprises This Week Reviewed by Marc Chandler on April 12, 2013 Rating: 5
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Adjustment Ahead of the Weekend, Yen Bounces

April 12, 2013
Corrective forces are taking hold in the foreign exchange market. It appears to have begun with Tokyo's reluctance to push the dollar through JPY100; frustrating the yen bears and spurring some profit-taking. If the short leg is being covered, the long-leg of the trades, like euro, sterling, Australian dollars and emerging market currencies …
Adjustment Ahead of the Weekend, Yen Bounces Adjustment Ahead of the Weekend, Yen Bounces Reviewed by Marc Chandler on April 12, 2013 Rating: 5
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What has Changed in the Emerigng Markets?

April 11, 2013
(from my colleague Ilan Solot )

1) The Bank of Korea is becoming more independent 2) We expect the Brazilian Central Bank to start hiking by 25 bp in May 3) Israel intervened to weaken the shekel for the first time since July 2011 4) Chile is stepping up its FX intervention rhetoric 5) Mexico suspends USD auctions to prevent peso weakness
1) The …
What has Changed in the Emerigng Markets? What has Changed in the Emerigng Markets? Reviewed by Marc Chandler on April 11, 2013 Rating: 5
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Displaced JGB Investors

April 11, 2013
(written with my Tokyo-based colleague Masashi Murata)
What the Bank of Japan is doing is not unprecedented. Rather it is the pace of its asset purchases that is striking. It will do in two years what the Federal Reserve took five years in terms of balance sheet expansion. It will boost its monetary base by around $1.335 trillion by the end of n…
Displaced JGB Investors Displaced JGB Investors Reviewed by Marc Chandler on April 11, 2013 Rating: 5
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Dollar Heavy, Poised for More Losses

April 11, 2013
The US dollar continues to trade with a heavier bias, though largely within recent ranges against the major currencies and emerging market currencies. Among the majors, to note is that sterling and the Australian dollar are trading at new multi-week highs. The wait to see the JPY100 print is being dragged out, though the markets willingness to s…
Dollar Heavy, Poised for More Losses Dollar Heavy, Poised for More Losses Reviewed by Marc Chandler on April 11, 2013 Rating: 5
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Great Graphic: The Most Important Chart to Understand the Political Economy

April 10, 2013
This Great Graphic was on the Washington Post's Wonkblog.  It shows the three key sources of income for the middle 20% of American households.  
Cash wages have fared the worst and are actually lower now in real terms (adjusted for inflation) than in 1979.  
Fringe benefits, the red line, most notably include health insurance and deferred com…
Great Graphic: The Most Important Chart to Understand the Political Economy Great Graphic:  The Most Important Chart to Understand the Political Economy Reviewed by Marc Chandler on April 10, 2013 Rating: 5
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Asia Impulses Dominate Activity

April 10, 2013
The US dollar is narrowly mixed against the major European currencies, but the dollar-bloc is stronger and the yen continues to sport a soft profile, though within yesterday's ranges. Events in Asia remain key to the global capital markets.
China shocked the market by reporting a $880 mln trade deficit instead of a $15.4 bln surplus the cons…
Asia Impulses Dominate Activity Asia Impulses Dominate Activity Reviewed by Marc Chandler on April 10, 2013 Rating: 5
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Great Graphic: QE Relative to GDP

April 10, 2013
This Great Graphic or some version of it has been circulating since the BOJ's announcement last week. This version was on Sober Outlook, who took it from Credit Suisse. It shows the growth of central bank balance sheets relative to nominal GDP.  Contrary to conventional wisdom, the Fed has been the least aggressive central bank since late 20…
Great Graphic: QE Relative to GDP Great Graphic:  QE Relative to GDP Reviewed by Marc Chandler on April 10, 2013 Rating: 5
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European Governments' Unpaid Bills

April 09, 2013
Over the past weekend, Italy's caretaker cabinet formally approved plans to begin paying its overdue bills to domestic suppliers and service providers.  Its official arrears have aggravated underlying problems, such as access to credit by small and medium size businesses, who are the main creditors.  The problems of the SMEs has also contribut…
European Governments' Unpaid Bills European Governments' Unpaid Bills Reviewed by Marc Chandler on April 09, 2013 Rating: 5
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