Home > Oct 2017 > Oct 30, 2017 China Down over 1% and Shanghai Copper Futures Continue to Slide

Oct 30, 2017 China Down over 1% and Shanghai Copper Futures Continue to Slide

October 30th, 2017

Our Futures in the third hour of the Europe Session are only down .13% after this. Shanghai Copper futures were down big again, this has been the theme since the end of the Congress. China’s 10 year Bond jumped to 2 year highs over fears that PBoC will be cutting back on liquidity. There is alot of Paper due this week in China fwiw. Of course, there is all the buzz about the new Fed Head, the announcement will be coming out this week. Most are betting on Powell who is a Dove, like Yellen, but a Republican. ALSO HE ISN’T an economist. Powell was a Political Science Major and went on to Law School, then worked as a investment banker. This might really change some of the use of Economic Models that Yellen loved? We will miss the Pearls. Congress of course is working on tax bill. Aussie is actually .13% to the USD which may be just T/A buying around 200 MA. Yet, KIWI down confirms risk on is not around. Not much in way of econ data and not much in big names reporting today in American Session. Market has rallied like 1929…really surprised that central banks allowed this to happen.

Oct 2017

  • Trading_Nymph

    From Reuters..SHANGHAI, Oct 30 (Reuters) – China’s 10-year treasury yields jumped to their highest level in more than two years on Monday on expectations that government efforts to reduce riskier lending will keep liquidity tight, outweighing sizeable injections by the central bank.

    Yields on 10-year treasury bonds rose as much as 7.6 basis points (bps) to 3.9 percent early on Monday, their highest since October 2014. They pulled back only marginally by midday.

    The gain was the biggest one-day rise since Jan. 5.

    The benchmark yield has now climbed 27 bps since the end of September, supported by persistent liquidity worries, strong Chinese economic data and rising U.S. treasury yields.

    Bond futures fell, with the most-traded Chinese 10-year treasury futures for December delivery sliding 0.6 percent.

    Top policymakers at China’s Communist Party Congress last week said that efforts to contain excessive risk-taking in the financial system will continue next year, with hints of more regulations in areas such as interbank borrowing and wealth management products. “TOUGH LOVE”

    Beijing’s “de-risking” campaign has pushed China’s money market and short term rates gradually higher so far this year, but also triggered periodic fears of liquidity squeezes and spikes in financing costs.

    While the People’s Bank of China (PBOC) has generally not responded as quickly to such market fears as in the past — perhaps to teach more aggressive risk takers a lesson — it has still stepped in frequently and added funds if rate moves appeared too volatile and threatened to roil financial markets or curb economic growth.

    The PBOC injected 150 billion yuan ($22.56 billion) into money markets on Monday and 140 billion yuan on Friday in an apparent attempt to soothe concerns over liquidity and falling bond prices.

    But yields have continued to rise, indicating traders and banks remain on edge heading into month- and year-end, when liquidity traditionally tightens.

    Highlighting its growing efforts to calm markets, the pace of the PBOC’s injections has increased since summer, clawing back much of the funds it slowly drained from markets earlier in the year as part of its tightening campaign.

    “The key reason is the internal factor. Market expectations have been affected by the positive outlook for economic fundamentals,” said Sun Binbin, an analyst at Tianfeng Securities.

    Julian Evans-Pritchard, China Economist at Capital Economics, said: “The deleveraging and financial risk campaign … was paused for a couple of months before the Party Congress.” It looked like the bias had tilted slightly towards easing, if anything, on the part of the central bank.”

    With the politically sensitive gathering out of the way, that temporary easing bias has now shifted back, with clear signals that authorities intend to put a new emphasis on reducing risk.

    But Evans-Pritchard cautioned against an excessively rosy view of China’s economic prospects over the next six months.

    While China’s growth has been surprisingly strong so far this year at around 6.9 percent, property and construction activity is slowing under the weight of measures to cool heated housing prices and higher borrowing costs.

    Stricter pollution measures over winter are also likely to curb industrial production in coming months. “As it becomes clear that the current strength of the economy is going to be short-lived, I think that expectations for further tightening are going to be reduced … so I don’t expect to see that much further upward pressure on bond yields,” he said.

  • Trading_Nymph

    Panther congrats on Astro Win last night. 3 to 2, this is close

  • panther341

    I was up too late watching and listening. Thanks. Still have to play 2 more games in LA – y’all have the home field advantage. It is very close!

  • panther341

    supposedly selloff today caused in part by House considering phase in for corporate tax relief. https://www.marketwatch.com/story/house-considering-gradual-phase-in-of-corporate-tax-cut-report-2017-10-30

  • Trading_Nymph

    I think this is the best world series…so many ties.

  • Trading_Nymph

    sounds good for a reason…anytime I can have a down Monday I am happy.