Home > Sept 2017 > Sept 21, 2017 BoJ did nothing, but S and P downgraded China Credit

Sept 21, 2017 BoJ did nothing, but S and P downgraded China Credit

September 21st, 2017

BoJ met and kept policy the same.  Norway kept rates the same….oh, and the S and P downgraded China’s Credit rating from AA- to A plus. That means all their corporate bonds are going to have to have a lower rating which decreases China’s liquidity as they push to sell their bonds around the world. Shanghai Futures have Copper, etc selling off on the news. Our Futures are flat cuz this is all time highs and nobody in it wants to walk away cuz it can only go higher…bubbles always seem to cause those feelings. RBA came out with a bit of dovish talked mixed with the China Downgrade has the AUD/USD down over 1%. Also remember China will be closed for holiday from Oct 1-8 which will slow down commodity buying leading into it fwiw.

Sept 2017

  • Trading_Nymph

    From Bloomberg…S&P Cuts China’s Credit Rating, Citing Risk From Debt Growth
    Bloomberg News
    September 21, 2017, 2:02 AM PDT September 21, 2017, 2:34 AM PDT
    Reduction comes just before key 19th Party Congress next month
    Credit growth ‘diminished financial stability’ to some extent
    S&P Global Ratings cut China’s sovereign credit rating for the first time since 1999, citing the risks from soaring debt, and revised its outlook to stable from negative.

    The sovereign rating was cut by one step, to A+ from AA-, the agency said in a statement late Thursday. The analysts also lowered their rating on three foreign banks that primarily operate in China, saying HSBC China, Hang Seng China and DBS Bank China Ltd. are unlikely to avoid default should the nation default on its sovereign debt.

    “China’s prolonged period of strong credit growth has increased its economic and financial risks,” S&P said. “Although this credit growth had contributed to strong real GDP growth and higher asset prices, we believe it has also diminished financial stability to some extent.”

    The downgrade, the second by a major ratings company this year, represents ebbing international confidence China can strike a balance between maintaining economic growth and cleaning up its financial sector. The move may also be uncomfortable for Communist Party officials, who are just weeks away from their twice-a-decade leadership reshuffle.

    The cut will “have a relatively big impact on Chinese enterprises since corporate ratings can’t be higher than the sovereign rating,” said Xia Le, an economist at Banco Bilbao Vizcaya Argentaria SA in Hong Kong. “It will affect corporate financing.”

    Moody’s Investors Service cut its rating on the world’s second-biggest economy to A1 from Aa3 in May, citing similar concerns over economy-wide debt and effects on state finances.

    “The market has already speculated S&P may cut soon after Moody’s downgraded,” said Tommy Xie, an economist at OCBC Bank in Singapore. “This isn’t so surprising.”

  • Trading_Nymph
  • panther341

    so alot of twitter talk about sell Rosh Hashana and buy Yom Kippur. Also the nerd guys will tell you that historically – over 50 years or longer, the 2 weeks following September triple witching are the weakest 2 weeks of the year. So we had how many central bank meetings??? LOL

  • panther341

    gold and commodities getting sold. gold and silver – wow. And gold down so much with the dollar also down.

  • panther341

    will be back to cleaning stuff out …. 🙂

  • panther341

    gold bounced at 50 day moving average (which was 1291.4). AAPL did not. gold trades technically. Next question – I would have thought 1300 would be support for gold. it is under 1300 right now but that may be a fluid level

    In meantime in chip land: AMD and NVDA making chips for TSLA self driving cars. NVDA not just a bitcoin trade. but now NVDA has competition on the self driving chip.

  • Trading_Nymph

    I was thinking about that old saying, Same as Sell in May and go away and come back on St. Leger Day (Sept 16th this year), lol. But with China going on VaCa at the start of Oct (which explains the weakness), may not be such a great idea lol.

  • Trading_Nymph

    Me too…you inspired me. lol.

  • Trading_Nymph

    1300 is a psychological point too