China won't change euro-zone bond holdings: SAFE
- Thread starter ASusilovic
- Start date
China's currency policy has been always about "stability" and predictability. If China is preparing some sort of shift from EUR in USD they do it over their weightings in their currency basket. This is simply done by moving more of their MONTHLY currency reserve inflows into the desired currency target. There is actually no "selling" of one specific currency involved.
Lower EUR is not in the interest of China's growth strategy for now.
This is a big event guys. Market now responding more to what China says it will do than the US. US is becoming 2nd to China.
LOL. Ok.
Silly commentary aside, a move up of this magnitude in futures is something other than related to the Chinese statement. The question is what truly caused it. So far all I'm reading is relief bounce. The other silly rumor is that N. Korea may be ready to apologize for the sinking of the S. Korea ship. Sounds like a bit of a stretch to me. I don't recall the North ever apologizing for anything. And how do you go from "We will ultimately destroy all enemies" to "Hey, bud, sorry about that. My bad."
How about oil at $73 from $67
Possibly, but oil is not being driven by demand/supply fundamentals from what I gather at this point. So it, too, is performing like a risk asset, and risk on with that move. So what's causing it to do so? A bounce? One could argue all risk assets are due for a bounce.
Another thing is currencies. Take AUD/JPY, for example, which has been a great proxy of risk in the past 14 months. It's moved up from lows, but no where near the magnitude of a move that you would have seen a few months ago with futures showing 30 points up in ES.
Nor is a lower greenback. Yet the debt problem is real and growing - and it looks to be inescapable. China's currency/economic strategy may appear to be an irresistable force, but the debt is an unmovable object in my eyes.
The destination is easy to see. As usual, we just don't know how long it'll take to get there.