Baltic Dry Index. 1718 +29 Brent Crude 72.82
Patriotism is supporting your
country all the time, and your government when it deserves it.
Mark Twain
Caution seems to be the big
message of the week, recommended by President Trump, and Iranian
Foreign Minister Javad Zarif. Who am I to disagree. All the more so given the
state of commodities especially copper and oil, a trade war set to escalate
next month, now just one week away, and a rising currency war, that isn’t a
currency war, at least according to China.
Below, many reasons to BE
CAUTIOUS!
Get your facts first, then you
can distort them as you please.
Mark Twain
Asia Stocks Gain; Yuan Slides to Lowest in a Year: Markets Wrap
By Andreea Papuc
Updated on 24 July 2018, 05:12 GMT+1
Asian stocks climbed Tuesday as rising yields boost financial shares. The
yuan tumbled to the lowest against the dollar in more than a year on further
signs of a shift by China toward monetary expansion.Equities gained across the region, with the steepest advances among Chinese shares as the nation’s assets came into focus after the government unveiled a package of measures to boost domestic demand amid simmering trade tensions that threaten to worsen an economic slowdown. The yuan slid as much as 0.6 percent a day after a record injection of funding for banks. China’s benchmark 10-year bond yield jumped to a four-week high.
A Chinese Foreign Ministry spokesman said Monday that the yuan is
“determined by the market,” after the Trump administration criticized the
recent weakening in the yuan’s exchange rate.
“We think it’s counterproductive for China and others to try and use
currency actively as a tool in a trade war,” Johan Jooste, chief investment
officer at Bank of Singapore, said in a Bloomberg Television interview. “In the
short run, they are probably quite happy to allow some depreciation to occur --
it might soften the blow -- but longer term what you will have is a series of
competitive devaluations and you are back to where you started.”
Financial
stocks as a group were among the biggest gainers on the MSCI Asia Pacific Index
on rising bond yields. Ten-year Treasury yields held around the highest in more
than a month after speculation arose that the Bank of Japan may consider
fine-tuning its stimulus programs -- reminding traders that the direction of
major central banks is toward rolling back quantitative easing.
More
July 23, 2018 / 11:37 AM
EU's Juncker will not bring trade offer to Trump talks: Commission
BRUSSELS (Reuters) - European Commission President Jean-Claude Juncker
will not arrive in the United States for talks with U.S. President Donald Trump
with a specific trade offer, the Commission said on Monday.
Juncker
will travel to Washington on Wednesday for talks focused on trade tensions
after the U.S. imposition of tariffs on EU steel and aluminum and Trump’s
threats to extend those measures to European cars.
Trump’s top economic adviser, Larry Kudlow, has said he expected Juncker
to come with a “significant” trade offer, but the Commission on Monday that
would not happen.
“I do not wish to enter into a discussion about mandates, offers because
there are no offers. This is a discussion, it is a dialogue and it is an
opportunity to talk and to stay engaged in dialogue,” Commission spokesman
Margaritis Schinas told a news conference.
Trump has repeatedly complained about the European Union, pointing to
the higher duties it applies for car imports and describing the bloc as a “foe”
in trade.
EU officials have said that, while EU import duties for cars are heavier
than those of the United States, for other products, such as trucks, U.S. rates
are higher. They also say cutting duties for cars could only be part of a
broader trade deal.
European Trade Commissioner Cecilia Malmstrom, who will accompany
Juncker, said last week that the European Union was preparing a list of U.S.
products to hit if the United States imposed tariffs on EU cars.
Schinas said Juncker was “very prepared” to set out European arguments.
“This is an occasion to de-dramatize any potential tensions around trade
and to engage in an open and constructive dialogue with our American partners,”
he said.
Mexico’s president-elect reportedly seeks quick Nafta deal
Published: July 23, 2018 8:17 p.m. ET
Peso gains as Trump hints at ‘dramatic’ deal with Mexico
Mexico’s President-elect Andres Manuel Lopez Obrador is reportedly seeking to quickly reach a settlement on North American Free Trade Agreement negotiations, and President Donald Trump on Monday hinted that a “very dramatic” deal is in the works.On Sunday, Reuters reported that Lopez Obrador sent Trump a letter calling for the U.S., Mexico and Canada to redouble their efforts to reach a Nafta deal, and that he hopes to “start a new chapter in the relationship between Mexico and the United States, based on mutual respect.”
Separately, Bloomberg News reported Mexico hopes to have a deal in place by the end of August.
Trump on Monday said that he is working with Lopez Obrador on something “very dramatic, very positive for both countries,” Bloomberg reported. Lopez Obrador told reporters in Mexico City that he did not know exactly what Trump was talking about, but that he was open to a deal.
Read: What’s next for Mexico and Nafta under President AMLO?
The leftist Lopez Obrador won Mexico’s presidential election earlier this month, and will be sworn in Dec. 1. He reportedly would like Nafta negotiations to be settled by then so he can focus on domestic issues.
Nafta
negotiations are scheduled to resume this week, and the three nations still
appear far apart on any agreement. Trump has repeatedly threatened to pull out
of the 24-year-old trade agreement, and threatened tariffs against vehicles built in Mexico and
Canada if no deal is reached.
Finally, in commodities
news, has copper finally bottomed out? Long term, it all depends on what
happens next in the Great Global Trump Trade War, against China, and NAFTA and
EU autos. Shorter term, China’s giant long in the copper market, has finally
been forced out and appears to have gone short. Is that a contrarian buy
signal?
With interest rates rising,
along with the risk of war between the USA and Iran by November, plus the trade
war about to intensify starting next month, in my way of trading synthetic double
options would seem to be the right speculation here. Dr. Copper at present is a
50:50 play.
In oil news, Trump v Iran
looks to be complicated.
July 23, 2018 / 3:21 PM
Commentary: What's behind the metals price rout, and is it over now?
LONDON
(Reuters) - Doctor Copper has been having a rough time over the last few weeks.
In London the price of copper for three-month delivery fell through the
$6,000 per tonne level last week for the first time since July 2017.
The Wednesday low of $5,988 per tonne marked a near 19-percent price
implosion from June’s high of $7,348.
Copper’s fall from grace has been part and parcel of a broader collapse
in industrial metal prices. The London Metal Exchange (LME) Index, a composite
of six base metals contracts, has experienced its steepest monthly fall since
late 2011.
Individual metallic narratives have been swamped by macro fears about
global growth, escalating trade tensions and gyrating foreign exchange markets.
Funds have turned net sellers across the LME spectrum, betting that
things are only going to get worse.
There has, however, been a small bounce this morning and contrarians
have started to emerge, arguing the sell-off has gone too far.
China
is still the driver of industrial metal prices, and signs of a loss of growth
momentum in the world’s single largest metals user formed the backdrop for the
current blood-bath.
China bears can take their pick of factors, from a crackdown on the
shadow finance sector, slowing property investment or sliding manufacturing
indices.
These concerns have been around for many months.
----If Doctor Copper really has that degree in economics, he’s telling us that a global recession may be on its way, a prospect discussed by my colleague John Kemp in a column last week.
Adding a little extra spice to this bear cocktail has been the
strengthening of the dollar, always a headwind for dollar-denominated
commodities of any kind, and the simultaneous weakening of the Chinese
renminbi.
Analysts have been tracking the lock-step movement of the copper price
and the yuan during this rout.
The 10-day correlation has been near 90 percent, according to ING’s
Oliver Nugent, a degree of synchronization that “hasn’t been seen since the
yuan was first liberalised in mid-2016 and the devaluation made a long
(Shanghai) vs short CME copper arbitrage the topical trade for shorting the
yuan”. (“What can stop the copper rout?”, July 20, 2018)
Much, if not everything, is going to depend on what happens next in the
U.S. Administration’s ratcheting up of trade tensions.
We’ve already had tariffs on imports of aluminium and steel, the ripple
effects of which are still running down those two markets’ respective supply
chains.
----Fund selling has been the accelerant of the last month’s price collapse.
One of the reasons copper has taken such a dramatic hit has been the
liquidation of a major fund position, held by Chinese futures brokerage Gelin
Dahua, in the Shanghai market.
Indeed, China’s last bull has now turned bear.
It now just one of many expressing their growing macro-economic concerns
by selling copper and other industrial metals most exposed to potential global
recession.
More
July 23, 2018 / 1:11 PM
Gelin, Gelin, gone: brokerage turning bearish on copper
BEIJING (Reuters) - Gelin Dahua, the Chinese futures brokerage that made
a name for itself by building up a massive long copper position on the Shanghai
Futures Exchange (ShFE), is now short on the metal for at least the next six
months, exchange data showed on Monday.
The firm, owned by Shanxi Securities Co, has been liquidating its
forward copper positions in recent weeks and on Monday cut its remaining 2,952
lots on the May 2019 ShFE copper contract, according to position data published
by the bourse.
The liquidation has coincided with a 9.8 percent drop in
Shanghai copper prices since June 11.
Monday’s move means that after holding more than 35 percent of the open
interest in ShFE’s first-half 2018 copper contracts in October last year, Gelin
Dahua is no longer in the top 20 long-position holders, among futures
brokerages, for any month listed on the ShFE website.
By contrast, it holds a short position of 6,839 lots across four copper
contracts from August to November 2018. Data for the February, March and April
2019 contracts was not visible.
In other metals, the brokerage is long on ShFE aluminium for October and
November — when many industry sources expect a repeat of seasonal restrictions on
smelting in China — and remains the top long-position holder on the exchange’s
January nickel contract with 4,052 lots, down from 5,251 lots on Friday.
Iran displaces Saudi Arabia as India’s No. 2 oil source; US curbs put Delhi in a fix
TNN |
Updated: Jul 24, 2018, 05:41 IST
Read more at:
http://timesofindia.indiatimes.com/articleshow/65110604.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst
http://timesofindia.indiatimes.com/articleshow/65110604.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst
Trump and Iran's Rouhani trade angry threats
July 23 2018.
Mr Trump tweeted Iran would "suffer consequences the likes of which few throughout history have ever suffered before" if it threatened the US.
Mr Rouhani earlier said that war with Iran would be "the mother of all wars".
In May, the US left a deal which curbed Iran's nuclear activities in return for the lifting of international sanctions.
Washington is now re-imposing the sanctions, despite objections from the
UK, France, China, Russia and Germany, who all signed the 2015 agreement.
But there are other flashpoints too. The US is deeply suspicious of
Iranian activity in the Middle East and is an ally of Israel and Saudi Arabia,
two of Iran's foes.
President Rouhani's comments, made to Iranian diplomats, did leave open
the possibility of future good relations with the US.
"America should know that peace with Iran is the mother of all
peace, and war with Iran is the mother of all wars," he said, according to
Iran's state news agency Irna.
Responding to Mr Trump's broadside, Iranian Foreign Minister Javad Zarif
tweeted: "Color us unimpressed."
COLOR US
UNIMPRESSED: The world heard even harsher bluster a few months ago. And
Iranians have heard them —albeit more civilized ones—for 40 yrs. We’ve been
around for millennia & seen fall of empires, incl our own, which lasted
more than the life of some countries. BE CAUTIOUS!
---- Mr Trump's angry rhetoric has echoes of his Twitter barrages against North Korea's Kim Jong-un, whom he branded a "madman". Their verbal hostilities nonetheless evolved into diplomacy.
On Monday, a senior commander in Iran's Revolutionary Guards suggested the US president's statements were part of a broader strategy.
"The remarks Trump makes against Iran are psychological warfare and he would be mistaken should he seek to take action against Iran," Gholamhossein Gheybparvar said, quoted by the Iranian Students News Agency
More
Suppose you were an idiot, and
suppose you were a member of Congress; but I repeat myself.
Mark Twain
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over.
Hmmm.
Never believe anything in
politics until it has been officially denied.
Otto von Bismarck
July 23, 2018 / 8:40 AM
China says it won't devalue currency to bolster exports
BEIJING (Reuters) - China said on Monday the value of its currency is driven by market forces and that it has no intention to devalue the yuan to help exports, after Washington said it was monitoring the currency’s weakness amid the escalating bilateral trade row.
The Chinese Foreign Ministry also said that threats and intimidation on
trade would never work on China, after U.S. President Donald Trump said he was
ready to impose tariffs on all $500 billion of goods imported from the country.
At a daily news briefing, ministry spokesman Geng Shuang was asked about
comments on Friday by U.S. Treasury Secretary Steven Mnuchin, who told Reuters
the yuan’s weakness would be reviewed as part of the Treasury’s semi-annual report
on currency manipulation, which is due on Oct. 15.
Mnuchin’s comments were the first since the early days of the Trump
administration in 2017 that
raised the prospect of designating China as a
manipulator.
Geng said the value of the yuan was subject to the forces of demand and
supply, and that healthy economic performance offered support for its level.
“China has no intention to use means like the competitive devaluation of
its currency to stimulate exports,” he said.
While the ministry has no say in currency policy, it is the only
government department which holds a daily news briefing that foreign reporters
can attend.
Neither the People’s Bank of China nor the State Administration of Foreign Exchange responded to requests for comment on Mnuchin’s remarks.
China's yuan CNY=CFXS, battered by the trade brawl and strong dollar, has lost more than 7 percent against the greenback since the end of the first quarter.
Around $505 billion of Chinese goods were imported to the United States in 2017, leading to a trade deficit of nearly $376 billion, U.S. government data shows. Chinese imports from the United States totaled $205 billion in the first five months of 2018, with the deficit reaching $152 billion.
Earlier this month, the United States imposed tariffs on $34 billion of Chinese imports. China promptly levied taxes on the same value of U.S. products.
“We advise the U.S side to remain calm and maintain a rational attitude,” Geng said.
If it looks like a
duck, swims like a duck, and quacks like a duck, then it probably is a duck.
President Trump, with apologies
to Anon.
Technology Update.
With events happening fast in the
development of solar power and graphene, I’ve added this section. Updates as
they get reported. Is converting sunlight to usable cheap AC or DC energy
mankind’s future from the 21st century onwards?
Vast solar power plant gets ‘significant’ investment from China’s Silk Road Fund
- The 700 megawatt Dubai Electricity and Water Authority Concentrated Solar Power project represents the fourth phase of the Mohammed bin Rashid Al Maktoum Solar Park.
- The solar park has a planned capacity of 1,000 megawatts by 2020 and 5,000 MW by 2030.
July 23, 2018
China’s
Silk Road Fund is to acquire a 24 percent stake in a large scale solar power
project in the United Arab Emirates (UAE), it was announced Sunday.
The 700 megawatt Dubai Electricity and Water Authority Concentrated Solar Power (DEWA CSP) project represents the fourth phase of the Mohammed bin Rashid Al Maktoum Solar Park, the biggest single-site solar park on the planet.
The DEWA CSP project was awarded to a consortium led by Saudi Arabia’s ACWA Power in 2017. ACWA Power, which develops, owns and operates power generation and water desalination plants, said the plant was expected to save 2.4 million tons of carbon dioxide per year.
“The introduction of a new investor into the DEWA CSP is absolutely in line with ACWA Power’s established strategy of sharing investments with value adding partners who will in turn bolster our projects,” Paddy Padmanathan, ACWA Power’s CEO, said in a statement.
“We could not have found a more capable partner than Silk Road Fund to complement DEWA and us on what is the largest single renewable energy project underway in the world today,” he added.
The Mohammed bin Rashid Al Maktoum Solar Park has a planned capacity of 1,000 megawatts (MW) by 2020 and 5,000 MW by 2030. It will use both photovoltaic and concentrated solar power technology to generate energy and will help to cut CO2 emissions by more than 6.5 million tons per year, according to DEWA.
The 700 megawatt Dubai Electricity and Water Authority Concentrated Solar Power (DEWA CSP) project represents the fourth phase of the Mohammed bin Rashid Al Maktoum Solar Park, the biggest single-site solar park on the planet.
The DEWA CSP project was awarded to a consortium led by Saudi Arabia’s ACWA Power in 2017. ACWA Power, which develops, owns and operates power generation and water desalination plants, said the plant was expected to save 2.4 million tons of carbon dioxide per year.
“The introduction of a new investor into the DEWA CSP is absolutely in line with ACWA Power’s established strategy of sharing investments with value adding partners who will in turn bolster our projects,” Paddy Padmanathan, ACWA Power’s CEO, said in a statement.
“We could not have found a more capable partner than Silk Road Fund to complement DEWA and us on what is the largest single renewable energy project underway in the world today,” he added.
The Mohammed bin Rashid Al Maktoum Solar Park has a planned capacity of 1,000 megawatts (MW) by 2020 and 5,000 MW by 2030. It will use both photovoltaic and concentrated solar power technology to generate energy and will help to cut CO2 emissions by more than 6.5 million tons per year, according to DEWA.
The monthly Coppock Indicators finished June.
DJIA: 24,271 +221 Down. NASDAQ:
7,510 +267 Down. SP500: 2,718 +169 Down.
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