Zhu Haibin via Caixin | High savings rates, a longtime hallmark of China’s economy, have helped the country retain its financial stability despite rapid economic growth. But China’s aging population is cutting into savings rates, and the effect on China’s economy and financial sector could prove disastrous.
Zhong Zhengsheng | The yuan has depreciated further against the U.S. dollar recently, with the central parity rate on July 6 hitting the lowest level since November 2010, at 6.68 yuan for every dollar.
America is slowly coming to the climax of its painfully long presidential election process. As usual, there is much talk about choices and little talk about the process for deciding which choices to make. The present election cycle is culminating in a choice between two candidates with a lot of negative baggage.
BoAML | Moving into 3Q16, we are updating the price deck for the mined commodities. Given the various shocks to the global economy and keeping in mind that uncertainty remains high, we have become slightly more cautious on the base metals.
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.