MLC Australia’s Post

"Global share prices made mild gains in August given hopes that lower interest rates are coming in Europe and the US later this year. However, there was considerable turbulence in share prices in early August given higher interest rates in Japan, subdued US economic activity and rising tension between Iran and Israel." MLC's Senior Economist Bob Cunneen provides his latest economic and market update for local and global markets - https://lnkd.in/ezJ7chtq #MLCAM #economics #markets #investing

Christiaan Tuntono , our Senior Economist Asia Pacific, shared his outlook on the Chinese economy as well as the Chinese Yuan (CNY) and Japanese Yen (JPY) on CNBC Street Signs today. Christiaan pointed out that the latest official PMI in China is consistently showing that domestic demand conditions are still challenging, although export has been doing relatively better, thereby supporting the Caixin PMI which surveys more private-sector export-oriented companies. Looking ahead, as global growth moderates and protectionist measures rise, Christiaan thinks that China’s current economic strategy of boosting industrial investments and exports may encounter rising headwinds. This explains why the government launches a centralized real estate sector rescue package in May which aims at digesting the excess inventory overhang in the real estate market, alleviates private-sector deleveraging and boosts consumption. Christiaan expects that it may take 12-18 months for the new property policy measures to show impact on driving the real estate sector recovery. On the currency front, Christiaan expects the RMB to remain largely stable, with its value against the USD driven by USD volatility and facilitated by Chinese authorities’ intervention. For the JPY, Christiaan expects the Bank of Japan to make a small 15-25 bp hike in its policy rate this summer, providing some marginal support to the JPY. Overall, Christiaan believes the pressure on Asian currencies will lessen if US inflation continues moderating, allowing the Fed to start easing its policy rate in 2H24. #ChineseEconomy #China #MonetaryPolicy #AsiaCurrencies

𝗖𝗵𝗶𝗻𝗮’𝘀 𝗗𝗲𝗳𝗹𝗮𝘁𝗶𝗼𝗻 𝗪𝗼𝗲𝘀 𝗗𝗲𝗲𝗽𝗲𝗻: 𝗔 𝗪𝗮𝗸𝗲-𝘂𝗽 𝗖𝗮𝗹𝗹 𝗳𝗼𝗿 𝘁𝗵𝗲 𝗚𝗹𝗼𝗯𝗮𝗹 𝗘𝗰𝗼𝗻𝗼𝗺𝘆? 📉 China’s producer prices have been in decline for 24 months straight, and consumer prices remain weak, pushing the country further into deflation territory. While China has cut interest rates and provided economic support, the situation highlights broader concerns. 🔍 𝗞𝗲𝘆 𝗣𝗼𝗶𝗻𝘁𝘀: • Producer prices keep sliding, affecting profit margins. • Consumer demand remains weak, suppressing price growth. • China’s economic slowdown has potential global ripple effects as it’s a major player in global trade. 📊 This deflationary pressure can impact everything from global supply chains to commodity prices. It’s a critical factor for investors and businesses alike, especially for those heavily linked to China’s economy. 🌍 As China ramps up its economic support measures, the world watches closely for how this deflation spiral might affect markets beyond its borders. How do you think China’s deflation will affect global markets and economies? Share your thoughts below! 👇 🔗 Follow Millennium Wealth for more insights on navigating financial metrics and making well-informed investment decisions. 🔗Subscribe: https://shorturl.at/Cb0dP #economy #globalmarkets #china #investing #deflation

Our latest Economic Letter from Asia has just been released. This week’s letter focuses on more themes relating to Asia. We analyse Asian currency performance, noting relative yen underperformance and rupee resilience. We then explore the role of yield differentials in explaining recent currency moves, noting some unaccounted variability, especially for the yen. We move next to examine monetary developments in Japan and divergent findings from the latest Tankan survey. Lastly, we touch on the slump in EV sales in China and export trends in South Korea. Read the full publication here: https://lnkd.in/eW3QB9qx Grab the free downloads here📥 📈 Chart JPEGs: https://lnkd.in/e2quMYWt 🖥 VG3 files: https://lnkd.in/euSDRYhh 📄 PDF: https://lnkd.in/e9MWywfZ For more info on our data offerings please email sales@haver.com

In China earnings are lower than when the MSCI launched in the index in 1994 and also lower than during the glorious miracle days, and the index has risen on a few spurts of optimism.#emergingmarkets

To make sense of what is happening in global trade, look no further than this graph. The graph from The Economist from a 2021 article pretty much sums it up. China’s trading partners are only growing. The West are trying to reverse it. This explains a lot of what you see in the news! Today in the news: 1️⃣ Biden to Hike Tarrifs on China EVs and Offer Solar Exclusions 2️⃣ China to Start $138 Billion Bond Sale on Friday to Boost Economy Last week: 3️⃣ China is Buying Gold, Sending Prices to Record Highs 4️⃣ Yellen Says Nothing Off Table in Response to China Overcapacity My worry is that de-globalization slows down the economy. It doesn’t help anyone. You might as well call it slow-balization. It also increases costs, so it is inflationary. Do you agree? #shipping #maritime

As China's Lunar New Year holiday ends, investors are eyeing the yuan with caution, anticipating potential depreciation. Implied volatility for the yuan has hit lows unseen since 2022, prompting investors to seek inexpensive hedges. Options have become popular for protecting against yuan depreciation, with short-dated volatility nearing multi-year lows. Experts suggest buying protection amid political tensions and China's economic challenges. As US data hints at persistent price pressure, expectations of Fed rate hikes increase, adding to the pressure for a weaker yuan.  #China #Yuan #Finance #Investing

Symptoms vs Causes Financial markets are generally a very good indicator as to what is happening in the economy. Falling long-term interest rates could indicated either slow economic growth in the months to come and/or falling inflation. China has an issue with both. Inflation is hovering around zero for the last couple of months and economic growth is not as strong as numbers would suggest. Albeit official economic numbers may indicate that the overall economy grows just above 4%. The equity market and bonds are doubtful. It could be rather 2% growth which financial markets are rather discounting. This would also explain the continues efforts by Chinese governments to get the property market going. The continued drag reminds of Japan over the last 30 years and could be a very similar trap for the Chinese economy. Surprisingly PBOC wants now to fight the symptom of the current difficult situation by selling “hundreds of billions” of bonds. This may impact the bond market and increase rates for a while but will hardly elevate current economic constrains. Rather PBOC shall target more accommodative monetary stance to help consumer and business to navigate current perilous waters. Targeting symptoms may hide the real message coming from the financial market. The economy is not as strong as the government would like it to be. The deep-rooted causes are not address sufficiently. #china #property #macroeconomy #economy #financialmarkets #markets #centralbanks #monetarypolicy #yields #moneymarkets #economics #pboc

💡In #China, the #economy is experiencing structural rebalancing amid deep real estate adjustment. 2024 Q2 GDP decelerated to 4.7% from 5.3% in Q1, with unbalanced economic structure that supply side is stronger than the demand side persisting. 🌏 Look ahead, the large-scale stimulus package and the US and Europe’s rate cut cycle provide room for China’s economic rebound. As the historical large China-US rate reversion gradually normalizes together with surging Chinese stock markets, there will be more capital inflows and stronger RMB. 💴 However, the recovery has not got a solid foundation as the deep adjustment of real estate and unbalanced economic structure remain; Deflationary environment and geopolitics risks also persist with weak market sentiments of households and enterprises not reversed. Download from here our https://bit.ly/4eLFYTE #ChinaEconomicOutlook. October 2024.

China's lower-than-expected inflation rate has sparked concerns about deflation, potentially impacting the country's economic growth and global trade, as a prolonged period of falling prices could lead to reduced consumer spending, decreased investment, and increased debt burdens. A deflationary spiral in China could have far-reaching consequences, including reduced demand for international goods and services, and increased global economic uncertainty, affecting countries and businesses around the world. Read full news at https://lnkd.in/dvN_PpMz #China #Inflation #Deflation #EconomicGrowth #GlobalTrade #ConsumerSpending #Investment #Debt #GlobalEconomy #Uncertainty #TradeWars #EmergingMarkets #FinancialMarkets #Commodities #CurrencyFluctuations #MonetaryPolicy #FiscalPolicy #EconomicIndicators #MarketWatch #DeflationFears #GlobalImpact #ChinaEconomy