Bijan Soltani

CHF/JPY finally broke down. See the chart below. This cross could hit 150 before year end. Japan's cabinet secretary Hayashi hints at higher rates. Some tidbits from the statement: OKYO, July 23 (Reuters) - Broadening pay hikes among smaller firms is crucial, said Japan's top government spokesperson, Yoshimasa Hayashi, underscoring the administration's drive to achieve sustained wage gains. Such gains have been a policy priority for Prime Minister Fumio Kishida's government, in its effort to prevent rising living costs from hurting consumption and derailing a fragile economic recovery. Hayashi's remark came in a Reuters NEXT Newsmaker interview ahead of the Bank of Japan's policy meeting on July 30 and 31, when the board is likely to discuss whether conditions allow it to lift interest rates from current levels near zero. It was crucial for Japan to achieve a "positive" cycle in which firms can pass on higher costs through price hikes, so that they can earn enough to keep raising pay, Hayashi added. "We expect the Bank of Japan to decide specific monetary policy with an eye on what's happening in the economy, and through close dialogue with markets," Hayashi, who is the chief cabinet secretary, said on Friday. "What's important is for a positive cycle to spread a bit more among smaller firms," he said, when asked about the expectations of some market players that the central bank could raise interest rates this month. In a shift away from a decade-long programme of radical stimulus, the Bank of Japan (BOJ) exited negative interest rates and bond yield control in March. Markets are warming to the idea of a rate hike at this month's policy meeting. BOJ Governor Kazuo Ueda has signalled the bank's readiness to hike rates if there is sufficient evidence that wage hikes will broaden, and keep inflation durably around its 2% target. While big firms have offered bumper pay hikes in annual wage negotiations this year, it is unclear whether their smaller counterparts can keep up. Asked about recent yen declines and their impact on the economy, Hayashi said it was desirable for currency rates to move in a way that reflected fundamentals, but declined to comment on whether recent levels were out of line with them. The yen has fallen more than 10% against the dollar this year to languish around 38-year lows, weighed down by the wide difference in interest rates between the U.S. and Japan. Tokyo is suspected to have stepped into the market this month to prop up the yen, which has hovered around 157.50 to the dollar JPY=EBS, after touching a six-week high of 155.375 last week in the wake of suspected intervention. Critics have said its focus on the need to beat deflation has become outdated at a time when Japan has faced inflation exceeding the BOJ's 2% price target for more than two years. #fx #Bank of Japan #higher rates #Japan #CHFJPY #currenices

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Ready to fly? #G7 #CPI (Orange) on the cusp of raising it s head again, or are we flooded with chinas overcapacity, which might be deflationary? Freigth rates are soaring from #china to the #world. In june alone by roughly 20% (Shanghai to Rotterdam / LA / Genua). The other side around freigth rates bearly moving (world to china). I ll stick with the longer term overlay that rising #container rates will drive up prices (or lower margins). For a decade lower margin items shipping did cost nothing and the world benefitted fom deflationary aspects. Now we are around 3 times higher than the 10y average and CPI seems bottoming out. Adding up to the US election fear of higher #tarifs and more spending. Ugly Q3 for rates ahead

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💱FX TRADER ALERT: STUDY JPY HISTORY...CLOSELY🔬 💱DEBATES ERUPTED about the "wonder" of the recent BoJ intervention (to the tune of $59bn) which yanked JPY back below 160. 💱THIS PIECE PROVIDES CONTEXT as Japan now runs a trade deficit, has depleted Fx reserves and is tip-toeing out of YCC. A trifecta of policy errors. 💱AN EXCERPT here: "IT IS EASY for investors to lose a fortune in the financial markets-and even easier for governments. In 2022 Japan spent more than $60bn of its foreign-exchange reserves defending the yen, its first intervention to strengthen the currency since 1998, after the exchange rate fell to nearly ·146 to the dollar. And for what? Today the yen is weaker still [155-160]. Yet instead of learning that fighting the market is futile, policymakers are repeating the mistake. After falling to 160/$ on April 29th, its lowest in 34 years, the currency twice moved sharply upwards in the subsequent days. It seems the government is buying again, to the tune of tens of billions of dollars." 🔬TAKE A LOOK AT THE JPY/USD chart. The trend is defo not their friend. #zerohedge #jpy #BoJ #treasury #fx #tradedeficit #deflation #inflation #carrytrade #hedgefunds

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'Alternative for Germany wins its first regional election' The political class's lack of courage is evident in the potential nomination of Cazenove as France's "new" Prime Minister. Schultz's party faces a similar fate, receiving one-figure percentage votes in both Landers, mirroring the catastrophic outcome seen with Macron's party in past elections. Instead of addressing the majority's concerns, the losers propose "new" solutions, such as excessive electrification to decarbonize economies, instead of promoting solutions to help decarbonize what existes. By neglecting the needs of the majority, these parties risk alienating voters and driving them towards extreme ideologies. It's crucial to uphold democratic principles by balancing policies that benefit minorities and the majority to prevent a repetition of history.

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Beijing's financial fireworks! 🎆💼 The People's Bank of China just dropped a stimulus package hotter than a Sichuan hotpot: Reserve Requirement Ratio: ⬇️ to 2020 lows 800B yuan injection: That's $114B of market juice! CSI 300 Index: 📈 4.3% (Talk about a market tiger!) With a 5% growth target looming, China's pulling out all the stops. But will this monetary magic trick conjure up the economic rabbit they're hoping for? 🎩🐰 What's your take on China's bold moves? Let's discuss! #ChinaEconomy #GlobalMarkets #FinancialStrategy

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The Swiss franc (CHF) has defied expectations, maintaining strength despite predictions of a decline. Bank of America (BofA) Securities notes that betting on CHF weakness has been a popular strategy this year, yet the currency has not weakened as much as anticipated. As of 08:25 ET (12:25 GMT), the USD/CHF pair traded 0.1% higher at 0.8525. While the currency is up 1.3% year-to-date, it has dropped 0.6% in the past month. BofA explains that expectations for CHF weakness are based on solid reasoning. Switzerland has a history of below-target inflation, a central bank committed to curbing significant currency appreciation, and a defensive domestic asset market—all factors that would typically lead to a weaker franc. However, this year has seen a significant shift. The first half of 2024 experienced notable CHF weakness, followed by recovery in the second half. BofA analysts highlight that the Swiss franc's resilience is largely due to its role as a risk-off hedge. Geopolitical tensions and global economic regime shifts have consistently supported CHF, reinforcing its appeal in times of uncertainty. Looking forward, BofA still views the carry trade as a potential pressure point for CHF. While there may be some near-term upside, the bank suggests that the currency is approaching a "sell zone" ahead of the Swiss National Bank's (SNB) policy decision on September 26. #Forexnews #News

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Market Meltdown: 10% Down in 14 Days! TLDR; 📉 Markets are down nearly 10% in the past 14 days. 🚨 Premarket turmoil: ES futures -3.4%, NQ futures -4.5%. 📉 Japan’s market crash affects global exchanges: NK futures -7.2%. 📉 Rate futures now show a 70% chance of a 50 bps rate cut in September. 📉 US 2Y-10Y yield curve inversion at -9 bps. 📉 Bitcoin drops below $57k, worst week since FTX collapse. 👋 Ahoy there Trader! 🏴‍☠️ It’s Phil… Grab your life vests! Markets are nearly 10% down in just 14 days, with premarket futures diving deep. Let's get into the chaos! 📉 Market Downturn: Markets are almost down 10% in the last 14 days. Premarket is a bloodbath just 90 minutes before the market opens. ES futures: -3.4% NQ futures: -4.5% 🌏 Global Impact: Japan’s market crash continues to influence global exchanges, marking one of its biggest one-day sell-offs since the 1987 Black Monday crash. NK futures: -7.2% overnight 💸 Rate Cuts on the Horizon: Rate futures now reflect a 70% chance of a 50 bps rate cut in September, up from 22% before the jobs report. US 2Y-10Y yield curve inversion at -9 bps, the lowest since inverting in 2022. 💰 Crypto Crash: Bitcoin continues to not be a flight to safety, dropping below $57k in its worst week since FTX collapsed. Bitcoin is off almost 30% since its July highs. Fun Fact: Did you know that the New York Stock Exchange (NYSE) started under a buttonwood tree? #spx #markets #trading #investing #stocks #stockmarket Liked this? ♻️ Repost to share!

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Pascal Coppens There is a very weird disconnect between economists and voters right now. So you have economists telling China that it should boost consumption and increase consumer confidence, while in the US/EU/UK the voters are absolutely going into revolt about the terrible economy. The basis for Chinese economic policy is that if you can invest in science and technology, that will keep growth rates high for decades to come, and lots of good things are going to happen. If you just move to consumption, then you are going to have massive underinvestment and you will end up in the economic mess that US and EU have. The fact that China is just crushing the EV market has less to do with state subsidies than the fact that there is so much money available for investment that you have new companies like BYD able to set up, whereas you didn't have this available for either the US or EU. Also economists talk about social welfare, but the problem with a European style welfare system is that you run out of money to pay for it. If you put money in investment then you provide money that go to jobs. You wonder why Guizhou has so many bridges, and it turns out that its better for society if you pay poor people to work as construction workers than if you just had them a check.

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"....Chinese stocks surged ahead on stimulus hopes ahead of a key Chinese economic meeting next week. The Shanghai Composite index jumped 0.9%, while the Shanghai Shenzhen CSI 300 index climbed 1.1%. Hong Kong's Hang Seng index surged 1.2%." 📈⚠️🇨🇳 #China #FXI #MCHI #KWEB #EEM https://lnkd.in/eExqn_Zr

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Japan Passed Out by Germany... Germany’s economic output surpassed Japan’s in 2023, for the first time in more than 50 years... And this was in a year when Germany’s economy shrunk, which just shows how Japan’s rapidly declining relevance is all about the currency impact... It’s important to register that this is the new paradigm for Japan, rather than a blip, which is why those who put too much weight on real effective exchange rates will continue to get the yen trade wrong... Japan’s economy was only passed by China’s in 2010; the latter is now four times the size and India will follow suit in the next few years... And Japan this year is again one of the worst-performing economies in the world...! Will Japan gradually fade into irrelevance, or be able to re-invent itself...? As long as Japan holds deeply negative real yields the Yen will depreciate and considering the debt pile it really can't cope with sustained positive yields.... So any intermittent bouts of strenght for the Yen when BOJ/MOF act will only be a temporarily relief... The country needs to grow out of its dept problem... otherwise Japan is at risk of completaly becoming irrellevant... My head tells me that to prosper anew Japan it must embrace a complete change ! #japan #germany #china #india #gdp #yen #forex #fx #currencies #boj #market #trading #finance #economy

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China Stock Market: Good Entry Level Created. After 2 days of panic sell down in HK & China shares, good entry levels have been created for high quality shares. Hang Seng & A50 offer great entry levels at yesterday's closing.

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Ruchir‘s 2025 prediction on China: Investable China The bear case is hard to argue against. No country with a shrinking population and a heavy burden of debt has ever been able to grow at even half Beijing’s target rate of 5 per cent. Still, any contrarian has to be curious about a market most global investors now dismiss as “uninvestable”, even though it is the world’s second largest. Diamonds can be found in this rough, for example by looking for profitable publicly traded companies with high cash flows. There are now about 250 companies in China with a market cap more than $1bn and a free cash flow yield above 10 per cent — roughly 100 more than in the US, and 60 more than in Europe. Yet sentiment is as bearish on China as it is bullish on America. Compare their leading electric car companies, BYD and Tesla. Both generate similar revenues and offer a similar return on equity, but sales volume is growing twice as fast at BYD, which is rapidly expanding its share of the global market. Yet BYD stock sells at a price-to-earnings ratio of 15, compared with around 120 for Tesla. Its market cap is just over $100bn, Tesla’s is more than $1.2tn. In the coming year, investors may come to see China as investable again, at least in its profitable parts. https://on.ft.com/3ZYXQ7Q

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China's Most Accommodative Monetary-Policy Stance Since 2011 Happy Monday! China shifts its monetary-policy stance to the most accommodative since 2011 in the latest Politburo statement on the 2025 economic work out today -- from "prudent/sound" (“稳健”) to "moderately loose" (“适度宽松”). Regardless, China might have to cut rates/RRR further in 2025 anyway, and the longer-end CGB yields might continue to form new record lows anyway. So why bother to tweak the stance? For the latest Bloomberg Intelligence take with Jason Lee out today, please visit the rates strategy homepage BI RATEN <GO>: "China's Monetary Policy Shift Needed With Rates at Record Low" (terminal link: https://lnkd.in/gtgmwzZk). #bloombergintelligence #china #bond #pboc #rates #us #federalreserve Decoding Policy Stance -- Literal to Numerical (Source: PBOC Quarterly Monetary Policy Reports; Bloomberg Intelligence)

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Kid of cynical... Yeah but the Chinese government is doing a ton of stuff in the real estate market, just not what the IMF suggests. I think that China is going to do well *BECAUSE* they are ignoring the advice of the IMF. I am a lot more cynical. The IMF tends to recommend whatever makes money for big banks. In most countries, the IMF is anti-bailout because any money that goes into the bailout doesn't end up in the hands of investors. So the typical IMF policy is to have the country screw over its citizens so that they can pay the loan sharks. In China, the government has made it clear that domestic savers get paid first, which makes the IMF pro-bailout since their ultimate goal is to make more money for Wall Street bankers. The thing that the IMF needs to explain to me is why is their advice to China, completely the opposite of the advice they give to most other countries. If someone can explain this to me with an explanation that isn't totally cynical (i.e. the main goal of the IMF is to make sure that Wall Street banks make money) I'd like to hear it. https://lnkd.in/gX3d4GAN

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