Bloomberg Briefs
Dollar fall
The greenback posted its biggest drop since Donald Trump's election as the Federal Reserve's minutes showed uncertainty over how the president-elect's policies would impact the pace of interest-rate hikes. The dollar was lower against almost all of its major peers this morning, with the biggest losses against Asian currencies. Bucking the trend was the Turkish lira, which fell to a new all-time low of 3.64 to the dollar this morning.
Yuan squeeze
China's attempts to control capital flows are paying off — in the short term, at least. The offshore yuan surged the most on record while the overnight deposit rate in Hong Kong also jumped to an all-time high of 80 percent, as the spread between the offshore and onshore exchange rates widened to the most since 2010. In China, the liquidity crunch is easing somewhat, but investors are bracing for another crunch during this year's unusually early Lunar New year. While the seven-day repo rate plunged 37 basis points, one-month Shibor continued to climb, rising for a 39th day in a row.
Gold rises, oil flat
Gold has risen to a four-week high as dollar weakness and safe haven demand ahead of Trump's inauguration increase appetite for the yellow metal. Oil, meanwhile, is broadly unchanged this morning, despite data showing OPEC's crude production fell by 310,000 barrels a day. The drop in production was not due to enthusiastic implementation of the production cut deal — which is due to start this month — but rather production problems in Nigeria.
Markets mixed
Overnight, the MSCI Asia Pacific Index added 1.2 percent, with Japan's Topix index gaining 0.1 percent as the weakening dollar weighed on exporters. In Europe, the Stoxx 600 Index was unchanged at 5:23 a.m. ET, while London's FTSE 100 Index was also unchanged despite positive services sector PMI data. S&P 500 futures slipped 0.1 percent.
Deutsche Bank's novel approach
As part of the company's $7.2 billion settlement with the U.S. government, Deutsche Bank AG is supposed to give relief to subprime mortgage borrowers. In order to avoid tying up capital by providing the loan relief directly, the bank is considering lending to firms like Lone Star Funds, which specializes in buying bad mortgages and lowering consumers' obligations, according to a person with knowledge of the matter. It is unclear whether U.S. authorities would accept the plan from Deutsche Bank, which is currently restructuring about $300 million of Trump's debt.
Остальное будет с усилиями с моей стороны, если будут конкретные запросы со стороны авторитетных пользователей — организуем.
It's jobs day, the yuan's wild ride continues, and how to spot an OPEC oil cut.
Jobs day
At 8:30 a.m. ET the Labor Department will issue December's U.S payrolls data, with economists surveyed by Bloomberg expecting employers to have added 175,000 positions in the month. With this week's Federal Reserve minutes showing jobs were a central topic of discussion at last month's meeting, signs of continued strength in the labor market should bolster the case for three rate hikes this year. A scheduling note: there is a chance the data release could be slightly delayed due to inclement weather in the Washington D.C. area.
Yuan falls
The offshore yuan fell as much as 1.1 percent to 6.8623 a dollar in Hong Kong, the most in a year, following a 2.5 percent surge over the past two sessions. Traders are now expecting further depreciation of the currency, with Benjamin Fuchs, chief investment officer at BFAM Partners in Hong Kong saying the tightening of capital controls risks eroding confidence in the currency. Goldman Sachs Group Inc. says it expects the yuan to grind lower throughout the year.
China's up for a fight
Currency concerns aside, authorities in China are making it clear that they are prepared for a trade war with the U.S. should President-elect Donald Trump take punitive measures against the world's second-biggest economy. The options being looked include subjecting U.S. companies with large Chinese operations to tax or antitrust probes, according to people familiar with the matter. The PEOTUS hasn't made many comments on China recently, instead using his Twitter account to try to move car manufacturing from Mexico.
Markets slip
Overnight, the MSCI Asia Pacific Index dropped 0.3 percent, with Japan’s Toyota Motor Corp. among the region's biggest fallers, following a Trump tweet about the company. In Europe, the Stoxx 600 Index was 0.2 percent lower at 5:25 a.m. ET as investors awaited the U.S. jobs report. S&P 500 futures were broadly unchanged.
How to spot an OPEC cut
Traders have a challenge in trying to spot when the announced OPEC production cut deal translates into on-the-ground reductions. The big problem is both the quality and timeliness of production data. The best data — stockpiles — are also those which are published with the longest lag, while upstream and midstream data tend to be based on estimates. For the moment, prices remain the clearest indicator of where OPEC's cuts are happening.