CHINA: BIG MISSES ON MACRO DATA & SURPRISE RATE CUTS
China’s central bank unexpectedly cut key policy rates for the second time in three months on Tuesday, in a fresh sign that the authorities are ramping up monetary easing efforts to boost a sputtering economic recovery. This move opens the door to a potential cut in China’s lending benchmark loan prime rate (LPR) next week.Earlier this morning, China reported big data miss in July. Retail sales rose by 2.5% in July from a year ago, below expectations for a 4.5% increase, according to analysts polled by Reuters. A spokesperson for the National Bureau of Statistics said the bureau is suspending the youth unemployment number release due to economic and social changes, and is reassessing its methodology. Source: CNBC
According to a FT article, Saudi Arabia and the United Arab Emirates are buying up thousands of the high-performance Nvidia chips
These chips are crucial for building artificial intelligence software, joining a global AI arms race that is squeezing the supply of Silicon Valley’s hottest commodity. The Gulf powerhouses have publicly stated their goal of becoming leaders in AI as they pursue ambitious plans to turbocharge their economies. But the push has also raised concerns about potential misuse of the technology by the oil-rich states’ autocratic leaders. According to people familiar with the moves, Saudi Arabia has bought at least 3,000 of Nvidia’s H100 chips — a $40,000 processor described by Nvidia chief Jensen Huang as “the world’s first computer [chip] designed for generative AI” — via the public research institution King Abdullah University of Science and Technology (Kaust).
Argentine Peso having a rough day. An 18% devaluation to 350 pesos per dollar (chart) accompanied by a 21 percentage point hike in interest rates to 118% …
Source: Barchart
The countries that have rarely borrowed, such as Brazil or Mexico, often pay much higher interest rates than those that have much higher debt ratios, like Japan or China.
Intriguing chart by Alpine Macro
Comparable countries bounced post-COVID, but US did not
~1 million Americans have died of OD’s just since 2010; that’s more than the # of Americans that died in all wars America has ever fought in. Source: The Economist Via Dan R Dimicco thru Luke Gromen
Capital allocation framework
Source: Brian Feroldi
Here is Ray Dalio’s portfolio
Source: Ken Shih
The clearest signal that Russia is losing this war?
The Russian ruble slid past 100 to the U.S. dollar on Monday, nearing a 17-month low as President Vladimir Putin’s economic advisor blamed loose #monetarypolicy for the rapid depreciation. The ruble has lost around 27% against the greenback since the turn of the year. It also has lost 23% vs Chinese Yuan, which Russia is embracing for trade as it seeks to ditch Western currencies. The Bank of Russia has blamed the country’s shrinking balance of trade, as Russia’s current account surplus fell 85% year on year from January to July. This slide that threatens to stoke inflation in an economy that has been kneecapped by Western sanctions. Source: HolgerZ, Bloomberg, DJ, CNBC
