Tuesday, August 25, 2015

Economic News , Data & Views ( August 25 , 2015 ) - Asia and Emerging Market updates ( China surprisingly cuts RRR & several interest rates after Shanghai Exchange closes below 3000 as Chinese Authorities allow market forces to seek proper level - plenty of granularity regarding China , Japan falls heavily for the second day in a row this week , Half of 30 biggest emerging markets in " Bear Market " territory already , Singapore heads to the polls Sept 11th ) ....... Europe Updates ( Bourses bounces back on Tuesday on positive German IFO Report , Euro drops in response to German data - IFO and H1 Surplus data , Data for Spain , Items on France and comments from French Econ Minister , Greece set to install Interim Gov't Thursday evening or Friday morning - additional items of note on Economy , Financial system and potential Snap election )


Evening wrap..... Latest from Asia/ Japan / China  trading for Wednesday ( August 26th - China Section below)



US....


  1. Dramatic reversal on Wall Street. Dow closed down >200 points, erasing earlier gains of 442 points.

















Latest sell-off in US stocks into the close not driven by any new fundamental news rather pick up of flow & vols amid large sell-side talk






China - and Asia Broadly .....














So, what now? Chinese markets all over the shop post-PBoC move, lurching lower now.
-2.3% CSI300 -1.7% -3.2% ChiNext -4.2%








Yuan weakening , follow on measure from China after RRR cut and interest rate cuts.







30 years to life for aggravated selling










CHINA SHANGHAI COMPOSITE SET TO OPEN UP 0.5% TO 2,980.79








China Devalues Yuan To Fresh 4-Year Lows, Probes Securities Firms, Restricts Futures Trading As Margin Debt Dro...








Devaluation Stunner: China Has Dumped $100 Billion In Treasurys The Past Two Weeks










RINGGIT EXTENDS LOSSES, NOW DOWN 1.9% VS DOLLAR








BREAKING: Chinese Police announced to crack down "underground banks", blamed for "hot money" inflow to grow speculations in stock market










MORE: Chinese Police has "destroyed" at least 66 "underground banks", involving 430 bln "illegal capital" incl some "hot money" in stock mkt








The Latest Currency War Entrant: India Warns May Retaliate To Chinese Devaluation











Dead cat bounce in U.S. stock markets. Come on PBOC, you have to think up something better than a couple of minuscule rate cuts.
















Citi: Between price action & conversation Tue, there seems to be consensus: action is not game changer & recent FX trends will persist






Death toll from Tianjin blasts rises to 135






Europe.....








Former Greek negotiator Houliàrakis is said to become interim Finance Minister due to his experience w the bailout MoU & the Troika.






Interview poll for Vergina TV
SYRIZA 24 ND 22 G Dawn 6 Potami 5.5 PASOK 4.5 KKE 4.5 Pop. Unity 4.5 Centre Union 4 Ind Grks 3 Other 5





Meimarakis & Lafazanis say they insist there's a last-effort meeting of all political leaders w Pres Pavlopoulos bfore snap elections called









Public debt as % of GDP, 2015 Japan: 243% Greece: 174% US: 105% France: 94% UK: 90% India: 66% Turkey: 36% China: 22% Russia: 13% Saudi: 2%










1 Two main impacts of China crisis on Greece: shipping (especially of dry goods) will be hurt.










2 market turbulence will make it even harder for Greek banks to raise capital from private investors. Will have to rely on bailout.






Party members are leaving Syriza so fast that I'm beginning to wonder how they'll find candidates to populate the ballot papers.









And meanwhile, Greek and int'l media are discussing Syriza's popularity & how they'll come stronger out of this mess.







11 suppl'ry funds are integrated into the Unified Auxiliary Insurance Fund (ETEA) as of Sep 1 (via )






Morning Tweets......








Asia Broadly , China & Japan  specifically  , Emerging Markets , Oil ......






China raising margins on CSI300 index futures... capitalization-weighted stock index for performance of 300 stocks in Shanghai & Shenzhen







China's financial futures exchange announces new rules including to raise margin requirement to crack down "excessive market speculations"








PBoC bombshell- cuts 1-year lending rate by 25bps to 4.6%, 1-year deposit rate by 25bps to 1.75%, RRR by 0.5ppt, further deposit rate reform







's central bank intervenes, cuts 1-year lending rate by 25 bps; 1-year deposit rate by 25 bps






RTRS - CHINA’S CENTRAL BANK CUTS BANKS’ RESERVE REQUIREMENT RATIO BY 50 BPS








CHINA CUT RRR & INTEREST RATES!!!!!







Russia +3.95% Saudi Arabia +4.6% Brent $44.08 Crude $39.50





Half of the 30 biggest emerging markets are bear , down 20% including via








’s yuan lending rates hit record high amid depreciation









"You will be deciding who will govern Singapore for the next 5 years," says


















Officials who favor "letting the market do its work Seem to be driving decision making right now."










It's about to get harder to move money out of China- new crackdown on "grey" fund outflows as yuan flight intensifies









margin debt now probably higher as % of free float than ever before. This doesn't even include non-margin stock linked debt.









"Not now darling, Papa Xi is busy playing with his war toys"








FACTS: After there were just another 2000 stocks down 10% daily limit on Tuesday in Chinese stock market. How many up? Only 28!








China's stock market crash impact: stock crash -> SME bankruptcy -> hard landing -> fail to redistribute wealth -> forget Xi's "China Dream"








BREAKING: China's stock market down over 8% again -- two large caps Sinopec and PetroChina both down 10%, w/ all listed brokerages down 10%









FT sources suggest that has spent $200bn since it devalued its currency 2 weeks ago. /via









Earlier today well-respected quoting official sources reports China won't intervene market any more after pouring big money recently








How low can it go? A lot lower as the comparison of Shanghai Comp w/ other bursted bubbles shows. (Chart via RBS)













This is scary - 3000 points for Shanghai benchmark index means A LOT to Chinese investors. Many began to buy when index rose to 3000 points!









Chinese Gov has so far not yet shown any support to stock market today, letting market fall like Isaac Newton's apple. So, just let it be?






BREAKING: Bye-bye! Shanghai benchmark index sinking nearly 7%, breaking psychologically important 3,000 points level











Shipping sources in Singapore say a slowdown in oil demand is now becoming visible








Oops! 's Nikkei extend it's slump. Ends down 4.0% at 17806.70 on angst.














6 hours agoAs much as $12.5 billion in oil money has been “diverted” away from the Nigerian government









Europe......





Euro drops below $1.15 as markets in Risk-on-Mode after China has cut benchmark interest rates.









* French economy minister says German economy will be affected more by China than France because of higher export exposure - RTRS








* French econ min says expects that FED chairman Yellen will not raise U.S. interest rates in September, at the earliest in December - RTRS






The Euro is currently more of a RoRo-trade (Risk-on/Risk-off trade). Drops after German Ifo beats expectations.








Not all gloom & doom. German Ifo defies market woes. Rises to 108.3 in Aug, points to GDP YoY growth of around 2%.



















| *FRANCE PAYS RUSSIA >1B EUROS FOR MISTRALS: INTERFAX








rise surprised me, no trace of effect. Postponed to September? outlook not too promising











| FRENCH ECONOMY MINISTER SAYS FRANCE WANTS TO SINK GOVT SPENDING TO AVERAGE EURO ZONE LEVELS BY 2022 ...lol...2022










achieves €21.1bn surplus in H1 2015 (1.4% of GDP). Federal govt reached €10.5bn, while states, municipalities & funds reached €10.6bn









| IFO ECONOMIST TELLS REUTERS MOST RECENT DEVELOPMENTS IN CHINA ARE BARELY REFLECTED IN IFO INDEX









European equities looking rosier on Tuesday /via








Germany's Dax stabilizes after yday's rout. Trades 1.4% higher after open in a very volatile session.










| *ECB SAYS BANKS DEPOSITED EU162.3 BLN WITH IT OVERNIGHT











| July PPI M/M: 0.1% v 0.9% prior; Y/Y: -1.3% v -1.3%













| ULYUKAYEV: GDP SEEN SHRINKING 3.3% THIS YEAR, INTERFAX ...was -2.8%





















Leader of 's breakaway Popular Unity asks for new Greek elections to be held later than Sept 20th:




















A foretaste of what 's new left-wing party of former SYRIZA rebels will be campaigning on...








stock market rebounds 5.3% today after a nosedive by 10.5% on Mon.









& banks converge on real GDP assumptions but diverge on nominal re stress test baseline scenario (via & )











President unlikely to call party leaders' meeting on Thurs. Straight to caretaker gov't, making Sept 20 elex possible via











interim government to be sworn-in on Thursday evening or Friday am. Sept 20 election date still stands.












Ex-Greek FinMin Varoufakis calls 's Schäuble a "puppet master" who minted the . via










| *GREEK BANKS SEE STRESS TEST BASELINE AS MANAGEABLE: KATHIMERINI ..."baseline" manageable ...that mean in no stress conditions?!







The quintessential *must read* about the Greek crisis: & Its Misguided Champions