Data Diary

Been puzzling as to what might be driving the consolidation in Chinese equities. Sure global equity markets have bounced back from the Euro conundrum – and China may have been a beneficiary as much as anywhere – but one-size-fits-all explanations are suspiciously shallow aren’t they? Looking at the price action, the strength of the selling [...]

The following chart throws up some interesting questions about the Chinese growth engine. In this we are looking at the relative performance of the Shanghai Composite as against commodities prices (as broadly mapped by the CRB index): So Chinese equities were first to accelerate out of the GFC lows fired up as they were by [...]

Perhaps it’s a function of being a resident of the deep south (hat-tip to all Tasmanians), but the view from the world’s shoelaces is currently dominated by China and it’s demand for commodities. As we noted in last week’s post, it looks suspiciously like China has loosened its monetary stance in response to the softening economic [...]

The Chinese economy will not experience a “double-dip” nor big fluctuations, and the government is capable and confident of keeping steady and relatively fast growth in the long-run, an official said Tuesday. Or so said Xinhua, the government run media organisation last week (here). This view has been supported by recent data released by the National [...]

China’s latest flash PMI data was not good (via Markit here) – if the trend continues, next month will see China on the wrong side of the ledger: You’d think that weakness in the China growth engine would be reflected in commodities prices – but the charts would suggest otherwise.  Consider that bellweather of commodity [...]

For all those that were thinking it might be safe to get back in the water, Chinese short-dated lending rates have exploded higher today – from Shibor.org: With interbank rates pushing higher across the curve, the screws are being tightened on debt-fuelled construction. Now wonder the Shanghai Composite has broken lower – down 0.9% again [...]

When you think about it, the imminent spike in mining related investment and its impact on Australian GDP is a pretty fair reflection of what has been going on in China for some time. Martin Wolf recently opined on the sustainability of China’s GDP growth without the government sanctioned infrastructure binge (here). It’s the Jim [...]

The Shanghai Composite has taken a hammering of late. There is plenty of room to the downside if this selling is going to develop into something more than a short term correction. Sentiment is clearly fading with ‘accounting irregularities’, rising funding costs for property developers and concerns about bank capital adequacy all being recent features [...]

In our last episode (here) we noted how China’s steps to tighten liquidity had begun to weigh on its equities markets – and most notably the energy and materials sectors. The question is whether the recent stalling in the copper price is reflective of this same effect: Seems like a reasonable argument.  Take for example [...]

A week of other commitments that have deprived me of this blogs warm embrace…and the US market is still playing to the same script – USD lower, equities higher. Still looks like a final thrust higher to my jaundiced eyes, which would be consistent I guess with the Fed spending its remaining QE pennies. Divergences are [...]