Rice prices soared to the highest in almost 15 years in Asia on mounting concerns over global supplies as dry weather threatens production in Thailand and after top shipper India banned some exports
Concerns over the potential impacts of El Nino on production in some suppliers provided further underpinning to prices, as did rain-induced interruptions and quality variability in Vietnam’s ongoing summer-autumn harvest,” a FAO report stated. India, the world’s leading rice exporter, banned exports of non-basmati white rice on Jul. 20, as the government seeks to keep a cap on soaring food prices at home, and ensure there are enough supplies domestically “at reasonable prices.” Source: Bloomberg. CNBC
China's consumer and producer prices both declined in July for the first time since November 2020, a sign of deflation pressure amid weakening demand
CPI dipped 0.3% from a year earlier while PPI retreated for a 10th consecutive month, sliding 4.4%. "China is in deflation for sure," said Robin Xing at Morgan Stanley. "The question is how long." The statistics bureau attributed the CPI decline to the high base of comparison, saying the dip is likely to be temporary. Source: J-C Gand
China's Inward Foreign Direct Investment Falls To The Lowest Level On Record...
Indeed, Inward FDI fell further in Q2: The preliminary Q2 Balance of Payments (BOP) data released last week showed China's current account still enjoys a healthy surplus, but the financial account continues to see notable net outflows. In particular, inward Foreign Direct Investment (FDI) fell to the lowest level since the series started in 1998. Source: SAFE, www.zerohedge.com
This could be a problem for sugar prices which already hit 12-year highs back in May
Source: Barchart
Which Countries Hold the Most U.S. Debt (which just got downgraded)?
With $1.1 trillion in Treasury holdings, #japan is the largest foreign holder of U.S. debt. Japan surpassed China as the top holder in 2019 as China shed over $250 billion, or 30% of its holdings in four years. the United Kingdom is the third highest holder, at over $655 billion in Treasuries. Across Europe, 13 countries are notable holders of these securities, the highest in any region, followed by Asia-Pacific at 11 different holders. A handful of small nations own a surprising amount of U.S. debt. With a population of 70,000, the Cayman Islands own a towering amount of Treasury bonds to the tune of $284 billion. There are more hedge funds domiciled in the Cayman Islands per capita than any other nation worldwide. In fact, the four smallest nations in the visualization above—Cayman Islands, Bermuda, Bahamas, and Luxembourg—have a combined population of just 1.2 million people, but own a staggering $741 billion in Treasuries. Source: Visual Capitalist
The Bank of Japan had to intervene twice this week to slow gains in govt bond yields, underscoring its determination to curb sharp moves in rates.
Nevertheless, the 10y Japanese yield has skyrocketed to 0.65%, well above the 0.5% from the YCC. Source: Bloomberg, HolgerZ
China's currency regulators are asking some commercial banks to reduce or postpone their purchases of U.S. dollars
That is in order to slow the yuan's depreciation, two people with direct knowledge of the matter said. The informal instruction, or the so-called window guidance, is the latest in a series of steps taken by authorities this year to bolster a currency that has been hit by China's faltering post-pandemic economic recovery and rising yields for the U.S. dollar and other major currencies. Source: Reuters
Tokyo core-core CPI inflation printed at +0.575% MoM
That's the 2nd biggest monthly increase since Covid. And one of the biggest monthly increases over the last 30 years outside of sales tax hikes. Inflation is not transitory in Japan... $JPY. Source: Viraj Patel, Vanda Research
