Newsworthy Snips

  • India Joins Brazil to China in Tightening Liquidity

July 16 (Bloomberg) — India stepped up efforts to help the
rupee after its plunge to a record low, raising two interest
rates in a move that escalates a tightening in liquidity across
most of the biggest emerging markets. Bond yields and the rupee

The rupee hit a 2 week high on the announcement and bond curve promptly inverted.

Quote an unnamed fund manager, ” India bonds, lesson learnt, dun play in that market.  1 policy measure wipe off 4 months of gains.”

My Question : When is Turkey’s turn ?

  •  A reversal of hot money inflows is a worry for Asia. But there’s another: policymakers must guard against their own savers turning tail.

  • RBA Says Rate Appropriate After Aussie Drop; Currency Gains

July 16 (Bloomberg) — Australia’s central bank said the
currency’s decline and past interest-rate cuts meant its policy
setting was appropriate even as it maintained room for future
reductions, according to minutes of its July 2 meeting.

  • ADB Trims Developing Asia’s Growth Forecasts on China Slowdown

July 16 (Bloomberg) — Growth in developing Asia will be
weaker than initially estimated this year and next amid a slower
expansion in China and lackluster export demand from advanced
nations, the Asian Development Bank said.

  • The Number 1 Thing Worrying Hedge Fund Managers Right Now

China Hard Landing and Commodity Collapse !

All negated by this headline this morning *CHINA’S JUNE FDI RISES 20.1% FROM YEAR EARLIER !! Expectations were for 0.7%.

And finally, Humphrey Hawkins tonight !

Taken from Citibank…
“While Chairman Bernanke is likely to continue to try to manage market expectations on the pace of tightening so as to limit negative fallout on asset markets, the Fed has had somewhat less success in moderating volatility in foreign exchange markets than is true for stocks and bonds. This suggests that even if the overall message remains the same, the bar for a modest change in language to trigger a move in FX may be low. Should the Chairman stress recent strength in economic data flow or the data dependence of Fed policy, this could trigger a reversal of recent USD selling.”