There Are Two Avenues For Markets

Forex News and Events: Yesterday FX had a busy day with risk appetite slowing, and traders migrated back into USD and JPY. Equities had an up and down day as the optimism generated by the strong Chinese PMI gained to last the day (coming in at 53.1). The catalyst looks to have been the mixed PMI data out of Europe and worrying unemployment data from the Eurozone. Germany outpaced estimates, but Sweden and France underperformed. Headline Euro zone PMI came in unchanged at 47.7. In a surprise comeback, UK PMI manufacturing jumped to 52.1 with the prior read revised higher to 51.5. This news combined with Switzerland PMI, which cleared the 50 threshold at 51.1, indicates that the economic problems are becoming increasingly isolated in the Eurozone. Eurozone unemployment climbed to 10.8 ...

(Reuters) - Record gold prices, rather than denting China's enthusiasm for bullion, have emboldened investors to plough more money into gold bars and riskier bullion-based derivatives. August is traditionally a slow month for Chinese jewelers, but many shops in Shanghai visited by Reuters reported surprisingly solid gold sales over the last few weeks, with shoppers unfazed by gold's stellar price gains over the past few months. "The surge in prices has sparked another gold-buying craze. The 50 gram and 100 gram gold bars were selling like hot cakes," said Ms. Liu, a store manager at Shanghai's major jeweler Lao Feng Xiang Co Ltd (600612.SS), who said gold sales this month were up at least 30 percent from a year ago. The attitude of Chinese consumers -- expected to soon overtake Indians ...

Central Falls, Rhode Island faces a plight that should be studied for its application elsewhere. It is nearly out of money. This is common news today, whether in Greece or California. The various parties are assumed to possess a means to carry on. This is assumed because it is generally so. The banks had the Fed; General Electric had the Fed and the FDIC; Greece has the ECB; California is prepared to launch a bridge loan. Despite the band-aids, the trend towards insolvency continues. Central Falls has reached a dead end. Quoting The New York Times (July 11, 2011): “The impoverished city, operating under a receiver for a year, has promised $80 million worth of retirement benefits to 214 police officers and firefighters, far more than it can afford. Those workers’ pension fund will ...

(Reuters) - China is working quietly behind the scenes to tighten its control of the rapidly growing offshore yuan market, and risks turning off some investors from participating in the market and slowing use of the renminbi in global trade. Chinese regulators are making bankers uneasy by systematically shaping the structure of the so-called CNH market through derivatives regulation and financial bureaucracy, banking and regulatory sources said. China's offshore yuan market, originally meant to be an experiment to help internationalize the yuan, has grown at a dizzying pace, with investors hungry for exposure to the strengthening but still non-convertible currency. Beijing, which has made currency reforms in fits and starts, has been trying to ensure a CNH derivatives market follows the ...

Can This Week's US Data Help Boost "US Recovery is Gaining Momentum" Story? We have been through a week that revolved around moves in equities - a slide due to the fear of China tightening rates and bond markets - that punished the government bonds of periphery Euro-zone nations on the back of possible default by Ireland. The USD benefited from both of these developments as it was bought as a safe haven. This week, the focus may return a bit more to fundamental data as traders and investors try and gauge the strength of the US economy. On November 5th the US released its monthly jobs report (Non-Farm Payroll) and it showed the economy adding 151K jobs, mainly in services. That had followed gains in activity in both the ISM Manufacturing Index which climbed to 56.6 in Oct from 54.4 in ...

BEIJING, May 5 (Reuters) - Greece's debt woes give China good reason to proceed cautiously with currency reform, but should not stand in the way of a resumption of the yuan's appreciation, government advisers said on Wednesday. That chimes with expectations in financial markets, which take the view that a decision by China to drop the yuan's 21-month-old peg to the dollar is now just a question of time. But the agreement among traders and investors ends there. It is impossible to tell how -- and when -- Beijing will reintroduce exchange rate flexibility given the clashing priorities of various constituencies within the administration and the highly political nature of the issue, which has become a touchstone of Sino-U.S. ties. The decision is of such importance that it will be ...