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Trinh Nguyen
@Trinhnomics
, 12 tweets, 6 min read Read on Twitter
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/…
NZ just cut rates by 50bps to 1% 😮, 25bps more than consensus. RBI next, we expect it to cut rates by 25bps

#CurrencyWar 🕊️🕊️🕊️🕊️
Interestingly, the AUD moved downward vs USD on this move (kiwi just lost 1% vs USD). So the RBA held but this NZ cut 🐏🐑🐄🐮will likely spur some action too by the RBA if it weren't already dovish.

#CurrencyWars 🕊️🕊️🕊️ Told u, interesting day 🦘
That cut was deeply felt by the NZD -1% vs USD (btw, that yuan fix on Monday achieved this so u either "fix" it or u cut the price of money 🤗)

🐮🐄🐑🐏 #CurrencyWar the Lord of the Ring edition.
Wanna see something cute? Okay, so NZD/CNY appreciated vs CNY when the PBOC did the weaker-than-expected fix on 5 August.

RBNZ just watched its 🐄🐮🐏🐑products getting more expensive in yuan. Okay, so it's like, I need to sell my milk etc to my precious customers. Bam! 50bps🔪
Ready? This is the Australian dollar #CurrencyWar story:
a) On 5 August, as the RBA was preparing to chill after slashing 50bps, the PBOC fixes the CNY weaker, & so the AUD appreciated against precious customers 🐄🦘🐨😱
b) RBA held
c) CNY fix weaker
d) NZD slashed🔪
e) AUD down!
AUD now the WEAKEST SINCE GFC AT 0.6724 per dollar (let's go to Australia everyone! Best place in the world!!!)

ON SALE!!! #CurrencyWar
India cut rates by 35bps - super duper more than the 25bps expected (okay, just 10bps) to 5.4%. The doves are spreading their wings!!!

#CurrencyWars India edition 🇮🇳 🕊️🕊️🕊️🕊️
Dollar is so 👑during Asian hours:
a) CNY fix was weaker-than-expected
b) RBNZ was like, I will follow wherever YUAN (you) go😉& 🔪rates by 50bps & NZD -1.9% vs USD
c) AUD -0.7% as doesn't want to be left behind
d) RBI 🔪rates by 35bps & INR weakens vs USD & CNY

#CurrencyWars
Bank of Thailand cut!!! Yay!! Called it (quoted in a paper by @SiegfridAlegado ) Wooo hooo 🍾

🇹🇭🔪🕊️🕊️🕊️🕊️🕊️

#CurrencyWar
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Trinh Nguyen
@Trinhnomics
China CPI rose to 2.8% from 2.7%YoY & expectations of 2.7%. PPI WORSE TO -0.3% YoY from 0% and expectations of -0.1%YoY.

That means expectations of help coming to stabilize the economy 😬
Note that the rise of CPI will make it a very delicate balancing act between making sure that higher food inflation isn't going to go higher. That said, the contraction of PPI just means profitability of firms are LOWER. What to do? How to help w/ FX, rates. guidance & fiscal👇🏻
PPI stands for producer price index & prices are contracting (down cycle happening) & help is definitely needed (this is why the 5 August Monday CNY fix was weak b/c China wants to export DEFLATION). CPI higher on food issues so CPI a hurdle for rate cuts for China but PPI isn't.
Read 8 tweets
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Trinh Nguyen
@Trinhnomics
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
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Trinh Nguyen
@Trinhnomics
So got asked about EM Asia resilience & impact of risk-off on EM Asia. This is not 2018 - the sell-off was very much a hawkish Fed story & trade-war was more later in Q4. CA deficit guys like Indo, Phil, India got hit hard as they needed USD funding. But this time is different...
Why is it different? The Fed just cut & likely to cut more (so not because of tighter USD liquidity). The cause of the sell-off is WORRIES ABOUT GLOBAL GROWTH (China using FX & fiscal to shelter the current account, meaning less imports from rest of the world so traders suffer)..
The sequence of events of the recent sell-off goes like this: a) Global data totally worrying; b)China data shows softening of demand - imports -4% & exports 0%; c)Asia traders like Korea just doing terrible (double digits decline of exports. AND THEN ESCALATION (Tweet meets fix)
Read 8 tweets

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IndoPacific_SCS_Info
@IndoPac_Info
Thread: FBI's Wray sounds alarm over #China, warns of 'severe counterintelligence threat' - FBI Director Christopher Wray warned Congress on Tuesday that China poses “a more severe counterintelligence threat” to the #UnitedStates than any other country. foxnews.com/politics/wray-…
Wray, who testified before the Senate Judiciary Committee, discussed the threat when asked about whether the bureau was prepared to combat any potential influence by foreign powers. “I would say that there is no country that poses a more severe counterintelligence threat to......
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IndoPacific_SCS_Info
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#China backtracked on nearly all aspects of #US trade deal - All of us that follow & know China knew that this was never going to fly. You can't negotiate with a rogue, predatory state like China. This is for the better. mobile.reuters.com/article/amp/id…
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IndoPacific_SCS_info
@IndoPac_Info
#China's Military Modernization Push Remains a Work in Progress - China trails the #US in terms of nuclear attack submarines, aerial refueling & a sufficient amphibious capacity, & it is unlikely to close the gap in the immediate future. worldview.stratfor.com/article/chinas…
Over the past 20 years, China has made tremendous progress in improving its military capabilities, but its modernization program will remain a work in progress in the decade to come.
China trails the US in terms of nuclear attack submarines, aerial refueling & amphibious capacity. Beijing will continue to develop its capabilities on these fronts, but based on current projections, it will not reach parity with the US by 2030.
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IndoPacific_SCS_info
@China_SCS_info
A black Friday in #China as exports shrink 20%, stocks plunges 4% and homeowners face new taxes. 👎🇨🇳👎  scmp.com/economy/china-…
China’s General Administration of Customs said exports were down by 20% in February year on year as the trade war with the United States took its toll on the world’s second-biggest economy.
China’s stock market also had its worst day in five months on Friday, with the benchmark Shanghai composite stock index shedding 4.4 per cent. Investor sentiment remains fragile, indicating that optimistic forecasts of a sustained bull market may be premature.
Read 8 tweets
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IndoPacific_SCS_info
@China_SCS_info
#China plans to sell #Pakistan an aircraft carrier and integrate it militarily - I believe a carrier for Pak is far fetched, but the article is very revealing about CN plans for Pak, something that usually gets dismissed @desertfox61I @avarakai sundayguardianlive.com/news/china-pla…
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Conscious Western efforts to retard its growth & access to hi-tech supply chains, Beijing has adopted an overtly benign tone with its neighbors. These are, however, cosmetic tactical measures & China’s ambition of developing “a kind of military force system” has not changed.
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Christophe Barraud🛢
@C_Barraud
🇨🇳 #CHINA Q3 GDP Y/Y: 6.5% V 6.6%E (slowest growth since Q1 2009)
*NBS spokesman Mao Shengyong said that the international situation was bringing “downward pressure” on China.
*Link: bloom.bg/2RVX1ZA
🇫🇷 🇪🇺 🇨🇳 French tire maker Michelin warned of declining sales in Europe and #China in the second half of the year, dragging down shares of its competitors in the U.S. and Europe - Bloomberg
*Statement: bit.ly/2EujhqH
🇺🇸🇨🇳🇪🇺 In a volley of filings, the EU, #China and the U.S. this week escalated disputes over new U.S. metals tariffs, the European response to those levies, and Chinese intellectual property practices - Bloomberg
bloomberg.com/news/articles/…
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