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What Really ‘Raises’ The Rising ‘Dollar’

By |2022-05-02T22:25:11-04:00May 2nd, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

It’s one of those things which everyone just accepts because everyone says it must be true. If the US$ is rising, what else other than the Federal Reserve. In particular, the Fed has to be raising rates in relation to other central banks; interest rate differentials. A relatively more “hawkish” US policy therefore the wind in the sails of a [...]

China Posts *Some* Kind of Upside

By |2022-03-15T17:54:57-04:00March 15th, 2022|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

They zig when they were supposed to zag. China’s PBOC was widely expected to drop its MLF rate, triggering the same for bank LPR (loan prime rate) which will be published this upcoming Monday morning (Beijing time). It would have been the third rate cut since December, though it should be noted Chinese authorities had already refrained from action in [...]

China’s Loan Results Back The PBOC Going The Opposite Way From The Fed

By |2022-03-14T19:29:54-04:00March 14th, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

This week will almost certainly end up as a clash of competing interest rate policy views. Everyone knows about the Federal Reserve’s upcoming, the beginning of what is intended to be a determined inflation-fighting campaign for a US economy that American policymakers worry has been overheated. The FOMC will vote to raise the federal funds range (and IOER plus RRP) [...]

PBOC’s Got A Lot To Juggle

By |2020-01-29T19:23:21-05:00January 29th, 2020|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

While China’s coronavirus outbreak dominates Western media attention, the Chinese economy has been off for its Golden Week New Year celebrations. Unfortunate timing, to say the least. While global markets have been digesting the latest developments, domestic markets in China have been closed. Nobody really knows how they will reopen on Monday. As a consequence, the People’s Bank of China [...]

China Doves

By |2019-04-23T12:19:27-04:00April 23rd, 2019|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

A little less than three weeks ago, the overnight unsecured money market rate for Chinese renminbi (RMB), SHIBOR, had fallen sharply to 1.417%. This was among the lowest in history, though it has been happening more frequently since last summer. That sounds like a good thing, only the low rates don’t ever last. Instead, over the next eight market sessions [...]

Further Early Confirmation on PBOC Intentions

By |2018-06-22T13:08:25-04:00June 22nd, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The level of Chinese bank reserves fell again in May 2018. Year-over-year, what is technically classified as Deposits of Other Depository Corporations on the PBOC’s liability (money) side of its balance sheet contracted by 1%. This advances a very different trend for reserves, breaking what had been a more continuous and determined effort toward at least minimal growth. The central [...]

Good Time To Review China Money Basics

By |2018-04-25T17:57:31-04:00April 25th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Since the announced conditional cut in China’s RRR won’t begin to show up in various figures (particularly for the MLF) until next month, the updated PBOC balance sheet for March 2018 is somewhat anti-climactic. Not only is it too early for what may follow given the policy shift, there are the usual if not more than usual Golden Week distortions [...]

Chinese Really Are Not Tightening, Though They Would Be Thrilled If You Thought That

By |2017-12-18T17:25:09-05:00December 18th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Why would any central bank try to disguise the fact that it is being highly accommodative in its own money markets? That would be a strange place to start, made all the more so by the further observation the same central bank is perfectly happy if you thought it was doing the opposite. Cryptic introduction aside, it is obvious I [...]

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