Yu Hairong via Caixin | A slowdown in private investment in China, fueling fears that the country’s growth could be weaker in the coming months, has policymakers scurrying to find solutions.
BoAML | Global coal prices rallied strongly since March on rising crude oil prices and Chinese production cuts. Front month coal prices in Newcastle rose by $5 to $50/mt, outpaced by a staggering $17 rise in 12-month forward prices to $58/mt. How did this happen? Higher oil prices pushed the global coal cost curve up by about $5/mt, on our estimates, explaining about 30% of the rally in coal forward prices.
J.L.M. Campuzano (AEB) | Little by little the markets are stabilising. Liquidity is improving and trading volumes are normalising (although they are still low…what is normal?)
James Alexander via Historinhas | Market Monetarists must hope that Mark Carney doesn’t seek to defend the pound, but let currency weakness do it’s magic, monetarily offsetting any expected economic weakness. A drop in the pound is not like a drop in the price of a company after a profit warning that reflects a weaker future.
Miguel Navascués | There are people who still believe the markets are efficient. When I say people, I mean a lot of people. Some of them unwittingly, of course. But the “progressive” academics, those who theorise about the matter, they believe in it consciously and defend it militantly. Its greatest defender is Eugene Fama, who won a Nobel Prize for Economy for this just a few years ago. The only thing to say is that Eugene believes that the 2008 financial crisis demonstrated the efficiency of the markets.
Francisco Vidal (Intermoney) | In the future it will be more difficult to generate inflation. We will see structurally lower rates, which should not be confused with its performance in the short-term.
Larry Summers has written a perceptive analysis about the Fed’s confusion (and that of all the central banks, by the way) over what they are doing. Last Wednesday he made a brief reference to the FOMC’s decision not to raise rates, with the Fed once again being forced to withdraw from its previous plan of action. The total failure of ‘forward guidance,’ which has only served to make the Fed’s prose even more tedious to hide their misgivings.
UBS | Economic data points to stabilization, but manufacturing and private investment weakened further. FAI growth’s disappointing slide to 7.5%y/y was mostly dragged down by a high base, weaker property investment, and sharper weakening of manufacturing.
Liu Caiping and Han Wei via Caixin | Domestically listed Chinese stocks failed to make the grade for inclusion in a key emerging markets stock tracker after their third attempt in three years, as index complier Morgan Stanley Capital International (MSCI) said more time was needed to see if recent reforms to China’s market will be effective.
Tao Jingzhou via Caixin | It’s been 15 years since China joined the World Trade Organization and yet China is still waiting for the WTO to grant market economy status. During this period, some Chinese businesses have expanded overseas while others have been accused of flouting international anti-dumping rules.