After rattling markets with the biggest one-day reset of the reference exchange rate for the renminbi (aka the yuan) since 2010 when it began to do so on a daily basis, the People’s Bank of China (PBOC) reassured markets on Thursday that this did not represent the start of an effort to push the yuan down. The central bank pledged to intervene to prevent large swings in the currency, and halted the yuan's three-day slide last week. Read more about China's Currency Move 08-18-15
In a surprising move, China announced that it will devalue the renminbi (RMB)—aka the yuan—by almost 2 percent. The People’s Bank of China (PBOC) reset the center of the yuan’s daily trading band by 1.9 percent lower to 6.2298 per U.S. dollar. This marks the lowest rate against the dollar for the yuan in nearly 3 years.
The PBOC also stated that rather than setting the trading band midpoint everyday, it will let the market determine the trading range, as the midpoint of China’s currency will be henceforth be based on the previous day’s closing price. Read more about PBOC's Surprising Move 08-11-15
In lieu of our regular weekly update, today we remind you that we will publish the August issue of The Cash Cow later this week. We will examine what the latest indicator readings say about the short-term direction of stocks, bonds, and precious metals. We will take a look at several recommended ETFs in our Core ETF section and how recent developments may impact them.
Anyone involved in the markets knows that commodities have been badly beaten down, with many individual commodities trading at multi-year lows. According to index measures, the group now trades at its lowest level in more than a decade. Yet the index values apparently overstate the decline. For one, the index tracks prices set on exchanges, subject to traders’ whims and speculation. Additionally, the indexes (for good reason) tend to give a lot of weight to oil, which means oil’s collapse over the past year has magnified commodities’ woes. Read more about Oil to Lead the Way 07-28-15
Yesterday witnessed a rout in the precious metals markets. At one point, gold dipped well below $1,100 before recovering somewhat to close above that mark; nevertheless it now sits at a five-year low. Within a span of a few minutes, gold fell by $45 on the Shanghai Gold Exchange (SGE). A curious dump of close to 5 tons of gold, roughly one-fifth of the typical trading volume in a single day, rattled the market. At around the same time as that gold trade, an unusual volume spike of some 7,600 gold futures contracts traded on the New York-based Commodity Exchange. Read more about China's Gold 07-21-15
The Greek leaders tried to drive a hard bargain, hoping that the threat of mutual financial and economic harm would force the Europeans to ease their austerity demands, but as it turned out, the Greeks in the end simply had more to lose if the country is forced to leave the euro. Without the prospect of help from another source, Greek Prime Minister Alexis Tsipras had no choice but to accept a deal on Europe’s terms. Read more about A Sigh of Relief 07-14-15