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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Hawkmoon who wrote (18000)	3/20/2016 11:53:59 PM
From: John Pitera	Read Replies (1) \| Respond to of 33421

China Adjusts Yuan by Biggest Margin Since November China sets the yuan 0.52% stronger against the dollar By GREGOR STUART HUNTER and EWEN CHEW Updated March 18, 2016 6:16 a.m. ET HONG KONG—China allowed the *steepest one-day gain in its currency against the dollar since November on Friday,* extending the yuan’s recent advances after the Federal Reserve this week said U.S. interest rates would likely rise at a slower pace than previously thought. China’s central bank fixed the yuan’s daily midpoint at 6.4628 yuan to the dollar, the currency’s firmest level since Dec. 16 and 0.52% stronger than the day before. This was the third-largest appreciation of the so-called fix since the yuan depegged from the U.S. dollar in 2005. After setting the exchange rate each day, the central bank allows the yuan to trade within a 2% band either side of it in onshore markets. Analysts had expected the central bank’s yuan fix to strengthen a day after the Japanese yen, the euro, and several emerging-market currencies rose sharply against the dollar. The Chinese currency’s recent strengthening stands in contrast to its moves in early January, when a sharp fall in its value contributed to a world-wide stock-market selloff. Market analysts expressed skepticism that the yuan’s bout of strength was here to stay. In offshore markets, where the yuan trades more freely, it also strengthened immediately after the fix Friday, but it slipped in later trading and was last 0.3% weaker on the day. “*Risk appetite has strengthened for Asian currencies against the U.S. dollar. That’s why the PBOC lowered the yuan fixing in the past two sessions substantially along with the other regional currencies,” said Qi Gao, currency strategist at Scotiabank—a lower fix means the yuan is appreciating against the dollar. “The depreciation pressure on the yuan is just easing a bit right now.” While the yuan’s recent strength appears a natural result of the dollar’s weakness, markets remain confused over the forces guiding the daily fix. In August last year, after an unexpected 1.9% devaluation of the yuan, which caused ructions across world markets,* the People’s Bank of China said it would allow market forces to play a greater role in determining exchange rates. In December it said it would set the yuan’s level by referencing a basket of 13 currencies, including the dollar, which is published by the China Foreign Exchange Trade System. More recently, the PBOC has said it would keep the yuan stable against a basket of currencies, referencing two further baskets—one compiled by the Bank for International Settlements, the other by the International Monetary Fund—when setting the yuan’s level daily. Even so, some analysts have suggested the central bank has been attributing greater weight to the U.S. dollar when fixing the yuan, meaning the yuan could effectively be pegged to the greenback. “It’s still up in the air as to what the focus for their currency is,” said Julian Evans-Pritchard, China economist at Capital Economics. “The yuan has been very stable against the dollar recently, and a lot of people were interpreting that as a sign they’d gone back to a soft dollar peg.” A stronger yuan could help China in its efforts to stem capital outflows. Chinese companies and individuals have been funneling cash offshore in recent months, partly in an effort to pay down U.S. dollar-denominated debt. China’s slower economic growth had also led to speculation the central bank would have to allow the yuan to weaken. However, Scotiabank’s Mr. Gao said he still expected the yuan to weaken to around 6.7 against the U.S. dollar by the end of the year, with the Fed still likely to increase rates eventually, and with no sign of meaningful improvement in Chinese macroeconomic data. Still, data released Friday showed an improved picture for China’s property market for the third consecutive month during February. New-build house prices rose in 47 out of 70 cities during February compared with the previous month, versus month-over-month increases in 38 cities during January http://www.wsj.com/articles/china-adjusts-yuan-by-biggest-margin-since-november-1458272139

To: Hawkmoon who wrote (18000)	3/23/2016 11:06:41 PM
From: John Pitera	2 Recommendations Recommended By 3bar Hawkmoon Respond to of 33421

Brazil ETF 16 year Monthly chart not looking so hot...... daily one year chart not looking all that crash hot either. bloomberg.com bloomberg.comhttp://www.bloomberg.com/news/articles/2016-03-23/brazil-real-drops-as-central-bank-moves-to-weaken-currency Brazil’s real dropped *the most among emerging-market peers as the central bank* extended its intervention to weaken the currency, a switch announced last week after three years in which policy makers worked to support the real. The central bank auctioned 17,000 foreign-exchange reverse swap contracts on Wednesday, equivalent to buying dollars in the futures market, and said it will reduce rollover auctions of contracts that bolster the currency to 2,500 contracts a day from 3,600 previously. The real lost 2.8 percent to 3.6849 per dollar, the most among 24 emerging-market currencies tracked by Bloomberg. Central bank policy makers are looking to damp the real’s appreciation after it climbed 9.4 percent against the dollar this year through Friday, more than any other major currency in the world, as the drive to impeach President Dilma Rousseff gained momentum. A weaker real helps exporters by making their goods cheaper in dollar terms, potentially offering a lifeline to companies and an economy suffering from the country’s worst recession in more than a century. *The currency plunged 33 percent last year. "Investors are becoming convinced the central bank intends to tackle the exaggerated appreciation of the real, that the move in recent weeks has a limit," said Camila Abdelmalack, the chief economist of brokerage CM Capital Markets in Sao Paulo. "The strong appreciation of the dollar is also weighing on the real and political developments in Brazil should keep the currency volatile." Traders dumped higher-yielding currencies worldwide after Chicago Fed President Charles Evans said two interest rate increases this year wouldn’t be unreasonable,* joining other officials who have said this week they expect to raise rates more aggressively than traders had been pricing in. A gauge of emerging-market currencies dropped 0.7 percent. The real extended losses after a news report on Uol website’s showed documents seized from construction company Odebrecht with alleged bribes for more than 200 politicians. "There are so many names in the list, spreading concerns that politicians from all sides are involved. It seems like no one is actually safe," said Reginaldo Galhardo, a foreign-exchange manager at Treviso Corretora de Cambio in Sao Paulo. "This generates more tension in the market." Brazilian swap rates on the contract maturing in January 2017, a gauge of expectations for interest rates, rose 0.01 percentage point to 13.72 percent. A gauge of consumer-price increases slowed more than analysts forecast in the month through mid-March. Inflation, as measured by the IPCA-15 index, decelerated to 0.43 percent from 1.42 percent a month earlier, the national statistics agency said Wednesday. That compares with the median estimate from 37 analysts surveyed by Bloomberg for a 0.54 percent increase. Annual inflation slowed to 9.95 percent from 10.84 percent. John