The FED chairman yet again, and at his most dovish, prepares us for rate cuts. We've heard this before and still no cuts.
The market carnage unleashed by the tiniest of rate hikes by the Bank of Japan, will likely reoccur as the FED cuts. Hedge funds are big boys and can look after themselves (ok LTCM couldn't) but there is a raft of dumber investors out there who were forced into chasing yield post pandemic.
The same type of investor that's locked into illiquid commercial properties.
Carry Trade Trap: The Real Reason Why The Fed Has Waited So Long To Cut Rates [Zerohedge]
Carry Trade That Blew Up Markets Is Attracting Hedge Funds Again [Bloomberg]
Gold Daily
Gold continues to shine. More central bank buying emerged this month.
Preparing for the worst? Polish central bank becomes biggest buyer of gold [Euronews]
The PBoC left rates unchanged as the economy continues to tank.
The predictions for population shrinkage are terrifying. China is locked in a doom loop now.
China's fresh urbanisation push may thwart 'birth-friendly society' goal [Reuters]
Too Much Steel in China Means Trouble for the World [Bloomberg]
BOJ’s Ueda Is Set to Face Intense Scrutiny After Market Chaos [Bloomberg]
A three-pronged rate cut story emerged this week.
Firstly the FOMC minutes showed the committee finally agreeing the the rate cut path. Then BLS announce a massive downward correct of the number of jobs reported by nonfarm payroll. Finally the Jackson Hole speech confirmed.
But will they actually do it?
Summary of minutes from the FED's July meeting
FED adding more liquidity now via repos
818,000 Jobs Over-reported
The US Labor Department revises 12-month job growth down to a massive -818,000 jobs from +506,000.
To no-ones surprise.
CRE losses are being crystallised and we'll see the results in due course, as banks and funds report.
Harris Supports Policies to Expand Crypto Industry, Aide Says [Bloomberg]
Canada CPI July 2024
Germany PPI July 2024
EU CPI July 2024
Germany Manufacturing PMI August 2024
Continuing pain in Europe and particularly in Germany
Grant Thornton has ‘questions to answer’ over Birmingham council bankruptcy[FT]
The RBA is embroiled in political fisticuffs withe the Treasurer. While they're playing handbags at dawn, markets are realising that the economy is weakening quickly now.
Don't expect China to keep Australia afloat.
The global haircut on CRE valuations and therefore loan book values, is coming home to roost.
Big banks pre-empt RBA move by cutting rates on term deposits [AFR]
New Zealand Accuses Australian Banks of Uncompetitive Behaviour [Bloomberg]
Dexus posts $1.5b loss as office values tumble [AFR]
Billions in private capital increasingly exposed to soured loans: Pimco guru [AFR]
Tax Office owed $9m in Mighty Craft collapse, debts hit $40m [AFR]
Markets will be looking at US core PCE to confirm the rate cutting agenda.
Remember that stock markets rallies anticipating rate cuts become stock market corrections / crashes when everyone realises that, as usual, central banks have left it too late and recession is looming.