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MT GLOBAL MARKETS Momentum Weekly Recap wk32 as of 09Aug19 - PFLUGPOST thread 1/n

• RiskOFF mode
• China allowed CNY to weaken
• safe haven rally bonds/gold/JPY
• creditspreads wider
• volatile stocks with some V-shaped intra-week rebound
• 10 further CB's cut rates!
2/n update Global Markets YTD as of wk32
3/n update Global Markets performance WoW, MoM, YTD, YoY as of wk32
Read 27 tweets
Good morning🌞- another hot & hazy Thursday in 🇭🇰. After a Trump Tweet meets a weaker Yuan fix, Asian central banks didn't stand by & slashed🔪rates (RBNZ -50bps, RBI-35bps, BOT-25bps). Today, we got the BSP & expect a 25bps cut w/ a RRR cut to add extra liquidity.

#CurrencyWar
China July trade data is out & expectations of a sharper contraction of imports & exports weak.

Note this: China using the current account as a 1st line of defense is boosting its trade surplus via REDUCTION OF IMPORTS & that is bad news for traders 👇🏻.

Trade relationship between the US and China & the amounts w/ tariffs so far (45bn left to retaliate) & the amount not yet by the US on China (300bn left) 👇🏻. Notice the asymmetric relationship & also the last tranche mostly consumer & capital goods so Trump'll tread gently.
Read 28 tweets
China fix 6.9996, a bit weaker than expected & the CNH bounced a bit. This is fun. If a currency needs a daily fix & the fix depends on both a formula & a "counter cyclical factor", basically whatever policy mandate, & FX can only be +-2%, & the PBOC says it's "managed" then...
@Trinhnomics said SK in particular was caught in the “crossfire” of the escalating US-China trade tension. “As Chinese demand declines, Korean exporters feel the pain of the trade war most acutely & why the Korean won has depreciated much more than the CNH
ft.com/content/f4fb96…
“We expect Asian central banks to keep easy monetary policy as economies remain weak,”said @Trinhnomics . China’s decision to let the yuan tumble adds “new headaches” for the region’s policy makers & forecasting rate cuts in India, the Philippines...
bloomberg.com/news/articles/…
Read 12 tweets

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