Market Soapbox 07/21/05 UPDATED
Resistance: DJIA 10625; SP500 1225; Nasdaq 2175; NDX 1575
Support: DJIA 10200 ; SP500 1210 ; Nasdaq 2100; NDX 1550
As we have maintained in these pages all along the RMB would be revalued in the 2nd half of this year, using a sliding 5% bandwidth.
Today China moved to revalue the yuan by 2.1% against the U.S. dollar, moving it to 8.11 yuan per dollar from 8.28.
The yuan will trade in a tight 0.3% band against the dollar and the Chinese government will announce a closing price against the dollar at the end of each trading day.
We expect another revaluation to bring the total adjustment to around 5%.
From 04/29/05: The Game is Afoot "Yen and RMB appreciation will temporarily help US exports and somewhat lessen the Japanese American Bond Carry Trade."
"As the Treasury needs to service the debt on our bonds and attract new money, our interest rates and the dollar will rise in accordance with the Yen and RMB appreciation."
The dollar was at a 14 month high vs the yen, the yen shorts got killed today and those cheap yen longs suddenly became valuable.
The yen is the big mover today, climbing 2.22% against the greenback to 110.30 yen per dollar, on anticipation of Japanese exports being more competitive compared to Chinese goods.
Come to Daddy and buy our stocks... equities could benefit from the move on anticipation of a weaker dollar and stronger yuan making U.S. goods more attractive. But this would only be temporary.
From 05/12/05: Who's Your Daddy? "Rates will go up father than anyone imagines, and a lot of speculators and ostriches are going to get their heads handed to them."
U.S. Treasurys sank on expectations the move could lead to less Chinese demand for U.S. bonds. To keep its currency peg, China needed to buy huge amounts of U.S. dollars and much of that was reinvested in Treasurys. The yield on the 10-year note rose 0.106% to 4.27%.
Our rates will continue to rise as the dollar strengthens; the RMB is revalued a second time; and the 30 year bond announcement in August.
And a hot flood of Chinese money is headed our way, begging to buy currently overinflated and soon after to be deflated assets. Its a theme park, and the theme is "yeah, we'll take your money".
Speaking of taking the Chinese for a ride, if I were a stockholder in Unocal, I would be pissed about getting screwed out of $4 per share on the subpar Chevron bid. Do the math, business is business.
Rejecting the Chinese bid is not only bad math, but to say its in the interest of "national security" is the most UNINTELLIGENT thing to do for our INTELLIGENCE COMMUNITY.
We want the Chinese (CNOOC) to own Unocal, it would be our trojan horse. All this protectionist rhetoric and theatre is really making me laugh. Do you really think Chevron or any corporation is any better than the Communist government? Wake up and get real!!!
For further details, refer to the 07/01 intelligence update.
European markets & Asian markets up. Dollar down vs. Yen/Euro, oil, commodities & bonds down, gold up.
Today's Soohey Pig Pig!! Award goes to me for letting the pig have a quiet day in its poke.
A hot ride down on the news of 4 additional blasts in London, (better get used to it)then a reversal, sideways then down day. Gold Bugs and Transports did well.
Perhaps a short position on QQQ or Microsoft or Google, as they report after the bell. If Google even hiccups, investors will make the pounding Intel & Yahoo took look like a walk in the park.
We take it day by day and keep our eyes peeled to the sky, because it could be a name brand that pancakes us. Just my opinion, I could be wrong.
Support: DJIA 10200 ; SP500 1210 ; Nasdaq 2100; NDX 1550
As we have maintained in these pages all along the RMB would be revalued in the 2nd half of this year, using a sliding 5% bandwidth.
Today China moved to revalue the yuan by 2.1% against the U.S. dollar, moving it to 8.11 yuan per dollar from 8.28.
The yuan will trade in a tight 0.3% band against the dollar and the Chinese government will announce a closing price against the dollar at the end of each trading day.
We expect another revaluation to bring the total adjustment to around 5%.
From 04/29/05: The Game is Afoot "Yen and RMB appreciation will temporarily help US exports and somewhat lessen the Japanese American Bond Carry Trade."
"As the Treasury needs to service the debt on our bonds and attract new money, our interest rates and the dollar will rise in accordance with the Yen and RMB appreciation."
The dollar was at a 14 month high vs the yen, the yen shorts got killed today and those cheap yen longs suddenly became valuable.
The yen is the big mover today, climbing 2.22% against the greenback to 110.30 yen per dollar, on anticipation of Japanese exports being more competitive compared to Chinese goods.
Come to Daddy and buy our stocks... equities could benefit from the move on anticipation of a weaker dollar and stronger yuan making U.S. goods more attractive. But this would only be temporary.
From 05/12/05: Who's Your Daddy? "Rates will go up father than anyone imagines, and a lot of speculators and ostriches are going to get their heads handed to them."
U.S. Treasurys sank on expectations the move could lead to less Chinese demand for U.S. bonds. To keep its currency peg, China needed to buy huge amounts of U.S. dollars and much of that was reinvested in Treasurys. The yield on the 10-year note rose 0.106% to 4.27%.
Our rates will continue to rise as the dollar strengthens; the RMB is revalued a second time; and the 30 year bond announcement in August.
And a hot flood of Chinese money is headed our way, begging to buy currently overinflated and soon after to be deflated assets. Its a theme park, and the theme is "yeah, we'll take your money".
Speaking of taking the Chinese for a ride, if I were a stockholder in Unocal, I would be pissed about getting screwed out of $4 per share on the subpar Chevron bid. Do the math, business is business.
Rejecting the Chinese bid is not only bad math, but to say its in the interest of "national security" is the most UNINTELLIGENT thing to do for our INTELLIGENCE COMMUNITY.
We want the Chinese (CNOOC) to own Unocal, it would be our trojan horse. All this protectionist rhetoric and theatre is really making me laugh. Do you really think Chevron or any corporation is any better than the Communist government? Wake up and get real!!!
For further details, refer to the 07/01 intelligence update.
European markets & Asian markets up. Dollar down vs. Yen/Euro, oil, commodities & bonds down, gold up.
Today's Soohey Pig Pig!! Award goes to me for letting the pig have a quiet day in its poke.
A hot ride down on the news of 4 additional blasts in London, (better get used to it)then a reversal, sideways then down day. Gold Bugs and Transports did well.
Perhaps a short position on QQQ or Microsoft or Google, as they report after the bell. If Google even hiccups, investors will make the pounding Intel & Yahoo took look like a walk in the park.
We take it day by day and keep our eyes peeled to the sky, because it could be a name brand that pancakes us. Just my opinion, I could be wrong.
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