August 17, 2023 | Daily JAM, Videos |
Today’s video is The Fed’s Dollar Currency Ripples. Monday, August 14 was a big day in the currency market with the currencies of China, Argentina, and Russia all making headlines. China’s yuan fell to its lowest level against the dollar since November. The Argentine peso collapsed as the government looks like it is losing its fight against inflation. The Argentine government raised rates by 21 percentage points to 118% and devalued the peso by another 18%. This immediate cause of the drop in the Peso was a surprise victory by a libertarian in a recent primary race for president. Argentine debt due in 2046 fell $0.04 to $0.28 on the dollar. Russia had an emergency rate increase of 350 basis points to a benchmark interest rate of 12%. Of course, none of these things are solely attributable to the dollar’s strength. China’s economy is slowing, Argentina is dealing with economic chaos, and Russia is feeling the effects of international sanctions due to the war in Ukraine. But, the dollar is very strong because it’s safe. The U.S. economy is showing surprising signs of growth with inflation going down and interest rates expected to remain high for some time. The popularity of the dollar in currency markets is creating big economic ripples. China, Argentina, and Russia are the tip of a very large iceberg. The World Bank and IMF say that 40% of the world’s poorest countries are on the verge of default. It’s time to watch your dollars, yuan, pesos, and developing country currencies closely.
January 31, 2023 | Daily JAM, Videos |
Today I posted my two-hundred-and-thirtieth YouTube video: Trend of the Week Watch the Yuan. This week’s Trend of the Week: Watch the Yuan. China controls one of the two largest treasury portfolios in the world, and the strength of the yuan affects treasuries worldwide. Right now, the yuan is under pressure from many different sources that I’m not sure the market is taking into account. China’s battle with high rates of COVID has left the Chinese government with two choices: either let the yuan fall and import inflation, or spend money to support the yuan causing inflation problems on the other end. It’s clear to me that China will provide stimulus to counteract the slowing economy from the COVID outbreak, which will put added pressure on the yuan. Additionally, as Russia tries to make up for losses in its oil exports, it really only has one option: sell from its huge currency reserve. Due to global sanctions, the only currency it can trade is the yuan. Expect to see Russia selling off its yuan to buy rubles in order to support its own currency. All these factors are putting pressure on the yuan. There’s a lot to watch in global currencies right now, including strange things happening with the yen in Japan and the dollar under pressure as the U.S. faces the debt ceiling crisis. Keep an eye on the Treasury market.
September 17, 2022 | Daily JAM, Friday Trick or Trend |
This past week the People’s Bank of China looks like it decided to defend the yuan instead of stimulating the economy.
August 15, 2022 | Daily JAM, Morning Briefing |
China’s factory output and consumer spending both slowed in July, new numbers released today by the National Bureau of Statistics showed. Industrial production rose 3.8% from a year ago. That’s lower than June’s 3.9% year-over-year rate and below economists’ forecast of a 4.3% increase. Retail sales growth slowed to 2.7% in July, lower than economists’ projection of 4.9%.
October 2, 2021 | Daily JAM, Friday Trick or Trend |
Our regular (or occasional or perhaps occasionally regular) Friday series (actually running on Satur... To subscribe to JAM you need to fill in some details below including, ahem, some info on how you'll pay us. A subscription is $199 (although if you're subscribing...
October 20, 2020 | Daily JAM, Short Term |
Even if House Speaker Nancy Pelosi and Treasury Secretary Steve Mnuchin reach a deal on a new coronavirus rescue and stimulus package sometime in the next week or two, it will die in the Senate if Majority Leader Mitch McConnell has anything to say about it. Today at...
September 6, 2019 | Daily JAM, Volatility, You Might Have Missed |
With China's economy expected to slow further in September after poor results in July and August, the People's Bank of China cut the amount of cash that banks must hold as reserves to the lowest level since 2007. The required reserve ratio for all banks will be...
August 26, 2019 | Daily JAM |
The U.S.-China trade war continues to erode business confidence in Germany. Business confidence in the country, home to Europe's largest economy, fell to its weakest level in almost seven years as a deepening manufacturing slump put the German economy on the verge of...
August 10, 2019 | Daily JAM |
... well, expect that nothing much else will matter if the yuan-dollar exchange rate moves noticeably up or down this week. In a normal week, investors and traders would be studying reports on inflation (CPI), retail sales, initial claims for unemployment, oil...
August 8, 2019 | Daily JAM, Morning Briefing, Short Term |
U.S. stocks rallied strongly today, Thursday, August 8, after the People's Bank of China set its daily reference rate for its currency at 7.0039 to the dollar. That was stronger than the 7.0156 yuan to the dollar overnight estimate of 21 analysts and trader surveyed...
August 7, 2019 | Daily JAM |
More tweets today from President Donald Trump in his campaign to pressure the Federal Reserve into more aggressive cuts to interest rates. “Incompetence is a terrible thing to watch, especially when things could be taken care of sooo easily. We will WIN anyway,” the...
August 6, 2019 | Daily JAM, Morning Briefing, Short Term |
Stocks rallied today on signs that the People's Bank intends to deliver an orderly drop in China's currency. This morning the yuan traded slightly above the critical 7 yuan to the dollar currency band. And the bank said it will sell $4.2 billion in yuan bills in Hong...
