‘The People’s Bank of China early Thursday set the yuan’s reference point at 7.0039 against one U.S. dollar. Still, it was not as weak as some had expected, heartening investors that China was not trying to start an all-out currency war” (market watch) “China wants to prevent a panic now, the PBOC will continue to send signals to stabilize the yuan in near term”(BBG )
China posted better-then-expected trade data despite the ongoing trade war with the U.S., showing July exports rose 3.3% year-over-year while imports fell 5.6%, with an overall trade surplus of $45.06 billion. Experts had been predicting exports to fall 2% from last year, and imports to sink 7.3%, with a trade surplus of $38.7 billion, according to the Wall Street Journal. Trade with the USA shrank but trade with EU increased.China;s Soy Imports 11-Month high,coal iron ore and Oil also rose per BBG
Stocks in Asia Closed higher as Tensions released from Markets psyche Shanghai Closed higher +.93 South Korea +.57%, China’s CSI 300 +1% Spoos +9 handles, Nasdaq +40 Dax +.7%,Cac +1.1% Relief rally weighing on Gold -$10 Bonds down a handle and Ultras -1.5 handles. Some fears or worries about how well the 30-year auction will go today weighing on prices as well. Dollar bouncing this morning but only a bit, JPY steady to higher and Euro steady. Italian Bonds an outlier this morning as they are down 100+ ticks yields -10 bps as per IFR news – Italian 10y spreads to Germany are 8bp wider this morning on the news overnight of an intensification of the intra-governmental crisis in the country. According to the Italian press, Deputy Prime Minister and League party leader Matteo Salvini has given an ultimatum that his senior coalition partner, the 5-Star party accedes to his demands over various policy issues, and even a re-shuffle of the cabinet.
Oil on the Bid after verbal Intervention from Saudi Arabia as they said they will “not tolerate lower prices” let us see how long the bid lasts I would not imagine not very.CL =2% Brent +1.3%. Metals Nickel +4%, Indonesia may bring forward an export ban quicker then thought, Aluminum +1.3% and Copper +1%
A sigh of relief today from markets as Panic and Worries regarding Trade war, currency war, race to the bottom are slipping a bit. Economic calendar very light again today, No fed speak as well. As usual, I will be on look for any Trump tweets or comments