Posts Tagged China Money Supply
China GraphFest May 11, 2010
Posted by Belisarius in China on May 11, 2010
As usual all the data from China cones at the same time. So, let’s start. In short: China trade balance for April was marginally positive, but in my opinion the China ability to run large trade surplussed is lost and will not return in short term. Implications are diverse, maybe most important the quantity of USD needed to be recycled via. U.S. government debt investments will cease to grow. Also, China cannot continue to import commodities at prices this high in long term. We can see an import price inflation mostly on commodity pride rises and export price deflation. Either prices will come down, either China will import less, or both.
China Inflation Accelerates in February
Posted by Belisarius in China on March 11, 2010
China consumer prices rose 2.7% in February vs. consensus of 2.5% and 1.5% in January. In the same time China producer prices rose 5.4% vs. consensus of 5.1% and 4.3% in January. This obviously is starting to represent a problem for The Peoples Bank of China as CPI this high brings real interest rates to negative -0.5%. Your author believes that a rate rise is imminent which is negative for equity and commodities sector.
Chart 1. Consumer Price Index & Producer Price Index
Source: Bloomberg
Targets
Posted by Belisarius in Markets on February 9, 2010
One of the most important piece of data being reported this week is Chinese money supply. When giving a little thought to the meter, it gives a negative impulse to the markets turned both ways. If the growth continues we have asset bubbles forming and inflation threat; If growth slows down we have a threat that China investment driven economic model collapses globally subdued demand for everything China imports. I will be interesting to see how the markets will react, in my view it could only be negative.
Interesting exercise David Rosenberg made yesterday in Gluskin Sheff economic commentary:
Asia In Green
Posted by Belisarius in Markets on December 11, 2009
Asian markets bounced on China industrial production figures. Apparently China’s factory output rose 19.2% in November vs. 18.2% consensus. Exports are running at -1.2% yoy, imports at +26.7% yoy.
CPI at 0.6% yoy in November vs. -0.5% yoy in October. PPI rebounded from -5.8% in October to -2.1% in November YoY.
New loans at Rmb295bn due to a smaller contraction in short-term loans and discount bills. Medium and long-term loans increased by only Rmb364bn, the lowest so far this year. New medium- and long-term loans to enterprises were just Rmb163bn, vs. Rmb457bn a month for first 10 months of 2009 and Rmb273bn in October.
China Loan Expansion Slows
Posted by Belisarius in Markets on November 11, 2009
A lot of economic announcements from China today. So, let’s start. China’s industrial production rose 16.1% in October from a year before following 13.9% rise in September.
The export decline slowed to 13.8% in October (year-on-year). If we adjust for holidays, it was down only 9.1% . The trade surplus rose to 23.99 billion USD – almost double in comparison to September.
Retail sales grew an annual 16.2% in October. Urban fixed-asset investment rose 33.1 % in the first 10 months of this year, easing from the month before reading of a 33.3%.
China Day
Posted by Belisarius in Markets on October 22, 2009
China GDP grew 8.9% in third quarter vs. 9% consensus. All risky assets headed lower on the news, U.S. dollar higher. Puzzled, makes no sense. Bloomberg explanation: China’s Economy Grows 8.9%, Fastest Pace in a Year.
The media focus is on stimulus, monetary expansion. Chinese officials have already addressed those issues, at least verbal. In my view the depressed exports; over capacity; real estate bubble; credit boom are big issues and I am little bit skeptic on can China ride out of this recession smoothly. Correction today in Asia on concern of stimulus withdrawal.
China Pause
Posted by Belisarius in Markets on August 27, 2009
Same as the day before, yesterday we saw mostly “better than expected” data from the US. Most notably new home sales were up 9.6% in July. Durable goods orders came 4.9% higher in July vs. 3% consensus and -2.5% the month before. Better than expected orders were mostly result of US government “cash for clunkers” program from which, by the way, mostly benefited Japanese auto makers. Durable goods ex transportation came at 0.8% vs. 0.9% consensus and 2.5% the month before.
Although better than expected I don’t see this data as a sign of recovery priced in equity at the moment. Market again failed to move up on the news.
The World Today
Posted by Belisarius in Markets on August 25, 2009
We have had some spectacular runs from the recent lows both in the equity arena and among commodities. As I am writing this introductory post markets are hitting new highs for the year. Common to these diverse markets is that we have seen little or no material improvement in underlying fundamentals only consolidation at initially depressed levels.
Chart 1. World Equity Indexes
S&P 500 in white; DJ Eurostoxx 50 in red; NIKKEI 225 in blue;
Hang Seng in yellow; Shanghai Composite in green