China Injects Most Short-Term Cash Into Banking System on Record - Bloomberg
China pumped the most liquidity into its financial system via short-term monetary tool on record, suggesting policymakers are keen to keep funding costs low to bolster the economy. The People’s Bank of China granted lenders a net 733 billion yuan ($100 billion) of cash with the so-called reverse repurchase contracts on Friday. That came after data released this week flashed signs of a pickup in the economy last month, when consumer spending and industrial production came in stronger-than-expected. Lenders keep one- and five-year loan prime rate unchanged. Source: Bloomberg
Is US inflation following the footsteps of the 1970s?
Source: Game of Trades
Mapped: Asia’s Biggest Sources of Electricity by Country
By Elements / Visual Capitalist
As stocks tumbled, the VIX soared
And after 105 consecutive days of closing below 20, the longest streak since 2019, the VIX index finally closed above 20 - in fact above 21 - breaking the streak on day 106. Source: www.zerohedge.com, Bloomberg
China has cut its holdings in US Treasuries to $805bn, the lowest level since 2009
Beijing has been selling $502bn in Treasuries in the past decade, & pace of Chinese selling has been accelerated recently. Source: Bloomberg, HolgerZ
BREAKING >>> Powell says inflation is still too high and lower economic growth is likely needed to bring it down
US 10-year is just 3bp shy of 5%... Federal Reserve Chairman Jerome Powell acknowledged recent signs of cooling inflation, but said Thursday that the slowing in price increases was not enough yet to determine a trend and that the central bank would be “resolute” in its commitment to its 2% mandate. “Inflation is still too high, and a few months of good data are only the beginning of what it will take to build confidence that inflation is moving down sustainably toward our goal,” Powell said in prepared remarks for his speech at the Economic Club of New York. “We cannot yet know how long these lower readings will persist, or where inflation will settle over coming quarters.” Source: CNBC, Ole S.Hansen, Bloomberg, Saxo
This is the first time since 2000 that Treasury Bills are yielding higher than the S&P 500 earnings yield
Even during the 2008 Financial Crisis, cash never yielded higher than S&P 500 earnings. And the gap between the SP500 earnings yield and cash is widening. Competition from cash and bond yields versus stocks keeps rising. For a USD-reference account investor, here's the median Return by Asset Class: 1. High Yield Savings Accounts: 5.5% 2. 6-Month Treasury Bill Yield: 5.0% 3. Investment Property Cap Rate: 4.5% 4. S&P 500 Earnings Yield: 4.2% Bottomm-line: Cash and Treasury Bills are now paying a HIGHER yield than real estate and the S&P 500. In other words, risky assets are paying less than risk-free assets, i.e taking a risk is compensated LESS than just holding cash. Source: The Kobeissi Letter
Italy budget deficit by Robin Brooks ->
Monthly data on Italy's fiscal balance are volatile, but the September 2023 budget deficit is the largest ever...
