Argentina’s massive stock market and currency sell-off triggers risk of contagion, analysts warn

Argentine President Mauricio Macri, who has been defeated in the primary elections for the reelection, during a press conference at the Casa Rosada, the government house, in Buenos Aires, Argentina, Monday, Aug. 12, 2019. The risk of contagion has flared-up following a stock market and currency crash in South America’s second-largest country, analysts told CNBC on Tuesday. Argentina’s President Mauricio Macri lost by a far greater margin than expected in primary elections on Sunday, casting seri


Argentine President Mauricio Macri, who has been defeated in the primary elections for the reelection, during a press conference at the Casa Rosada, the government house, in Buenos Aires, Argentina, Monday, Aug. 12, 2019. The risk of contagion has flared-up following a stock market and currency crash in South America’s second-largest country, analysts told CNBC on Tuesday. Argentina’s President Mauricio Macri lost by a far greater margin than expected in primary elections on Sunday, casting seri
Argentina’s massive stock market and currency sell-off triggers risk of contagion, analysts warn Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-13  Authors: sam meredith
Keywords: news, cnbc, companies, mauricio, stock, contagion, massive, selloff, argentinas, reelection, president, markets, triggers, market, macri, warn, primary, rates, told, risk, currency


Argentina's massive stock market and currency sell-off triggers risk of contagion, analysts warn

Argentine President Mauricio Macri, who has been defeated in the primary elections for the reelection, during a press conference at the Casa Rosada, the government house, in Buenos Aires, Argentina, Monday, Aug. 12, 2019.

The risk of contagion has flared-up following a stock market and currency crash in South America’s second-largest country, analysts told CNBC on Tuesday.

Argentina’s President Mauricio Macri lost by a far greater margin than expected in primary elections on Sunday, casting serious doubt over the incumbent’s re-election chances in October.

The surprise result set off a shockwave in financial markets, with the peso closing 15% weaker at 53.5 per U.S. dollar and Argentina’s stock market plunging more than 30%.

It marked the second-biggest one day slump anywhere since 1950, Reuters reported.

Andrea Iannelli, investment director at Fidelity International, told CNBC’s “Squawk Box Europe” on Tuesday that it was hard to see how Argentina’s stock market and currency crash could be completely isolated.

“We are going to get a spill over (or) contagion of some sort.”

“But… Let’s not get too carried away because the general fundamental picture in emerging markets — with a Federal Reserve that continues to cut rates and global monetary policy that is being eased everywhere — is actually pretty good,” Ianelli said.

Emerging markets are likely to benefit from lower borrowing costs stateside because it gives them welcome breathing space to cut rates and get back on a path to higher growth.


Company: cnbc, Activity: cnbc, Date: 2019-08-13  Authors: sam meredith
Keywords: news, cnbc, companies, mauricio, stock, contagion, massive, selloff, argentinas, reelection, president, markets, triggers, market, macri, warn, primary, rates, told, risk, currency


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China fixes yuan midpoint at 7.0211 on Monday — weaker than 7 for three consecutive sessions

The People’s Bank of China set the official midpoint reference for the yuan at 7.0211 per dollar on Monday — weaker than Friday’s session, but stronger than what market watchers predicted. This is the third consecutive session where the central bank set the midpoint at a level weaker than the psychologically important 7-yuan-per-dollar level. A weaker currency makes a country’s exports cheaper and the Trump administration has consistently complained that a cheaper yuan will give China a trade ad


The People’s Bank of China set the official midpoint reference for the yuan at 7.0211 per dollar on Monday — weaker than Friday’s session, but stronger than what market watchers predicted. This is the third consecutive session where the central bank set the midpoint at a level weaker than the psychologically important 7-yuan-per-dollar level. A weaker currency makes a country’s exports cheaper and the Trump administration has consistently complained that a cheaper yuan will give China a trade ad
China fixes yuan midpoint at 7.0211 on Monday — weaker than 7 for three consecutive sessions Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-12  Authors: saheli roy choudhury
Keywords: news, cnbc, companies, china, currency, trade, weaker, session, set, midpoint, rate, yuan, consecutive, dollar, sessions, 70211, fixes


China fixes yuan midpoint at 7.0211 on Monday — weaker than 7 for three consecutive sessions

The People’s Bank of China set the official midpoint reference for the yuan at 7.0211 per dollar on Monday — weaker than Friday’s session, but stronger than what market watchers predicted.

This is the third consecutive session where the central bank set the midpoint at a level weaker than the psychologically important 7-yuan-per-dollar level.

Analysts were expecting the PBOC to set the midpoint at 7.0331 per dollar, according to Reuters estimates.

Investors have been monitoring the dollar/yuan exchange rate closely following an escalation in trade tensions between Beijing and Washington.

The yuan depreciated past 7 per dollar on Monday last week for the first time since the global financial crisis in 2008, which prompted the U.S. Treasury Department to designate China as a currency manipulator. A weaker currency makes a country’s exports cheaper and the Trump administration has consistently complained that a cheaper yuan will give China a trade advantage.

The PBOC allows the local currency to fluctuate against the greenback within a narrow band of 2% from each day’s midpoint. This is known as the onshore yuan, whereas the less restrictive exchange rate used outside mainland China is known as the offshore yuan.

Onshore yuan was near flat at 7.0613 per dollar while the offshore yuan traded around 7.0887 on Monday at 11.24 a.m. HK/SIN.


Company: cnbc, Activity: cnbc, Date: 2019-08-12  Authors: saheli roy choudhury
Keywords: news, cnbc, companies, china, currency, trade, weaker, session, set, midpoint, rate, yuan, consecutive, dollar, sessions, 70211, fixes


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Peter Navarro says US will take strong action against China if it devalues yuan to ‘neutralize tariffs’

White House trade advisor Peter Navarro said China plans to devalue its currency — and if it does, the U.S. will respond forcefully. “Clearly, they are manipulating their currency from a trade point of view,” Navarro told CNBC’s “Closing Bell ” on Friday. Earlier this week, China allowed its currency to drop against the dollar to a key level unseen since 2008. Navarro said China was taking actions to deal with the effects of tariffs. “China has devalued its currency by over 10% with the express


White House trade advisor Peter Navarro said China plans to devalue its currency — and if it does, the U.S. will respond forcefully. “Clearly, they are manipulating their currency from a trade point of view,” Navarro told CNBC’s “Closing Bell ” on Friday. Earlier this week, China allowed its currency to drop against the dollar to a key level unseen since 2008. Navarro said China was taking actions to deal with the effects of tariffs. “China has devalued its currency by over 10% with the express
Peter Navarro says US will take strong action against China if it devalues yuan to ‘neutralize tariffs’ Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-09  Authors: kate rooney
Keywords: news, cnbc, companies, week, devalues, white, yuan, action, china, tariffs, currency, strong, trade, tariffschina, trump, navarro, neutralize, peter, stop


Peter Navarro says US will take strong action against China if it devalues yuan to 'neutralize tariffs'

White House trade advisor Peter Navarro said China plans to devalue its currency — and if it does, the U.S. will respond forcefully.

“Clearly, they are manipulating their currency from a trade point of view,” Navarro told CNBC’s “Closing Bell ” on Friday. “They’re going to, and we’re going to take strong action against them.”

Earlier this week, China allowed its currency to drop against the dollar to a key level unseen since 2008. The Trump administration later labeled Beijing a “currency manipulator. ” Navarro said China was taking actions to deal with the effects of tariffs.

“China has devalued its currency by over 10% with the express purpose of neutralizing tariffs, full stop,” Navarro said.

Last week, President Donald Trump abruptly ended a cease-fire with China by announcing 10% tariffs on $300 billion worth of Chinese goods, claiming China failed to buy U.S. farm goods as it promised. The trade war continued to boil over this week as China announced it would stop buying American agricultural products in retaliation for Trump’s surprise tariffs threat.

Navarro said that every American farmer will be “made whole” and “will not be hurt by China.” He also insisted that China, not U.S. consumers, will suffer financially because of tariffs.

“China will bear virtually the entire burden of that through the currency manipulation and by slashing prices,” he said. “China is the one that suffers far more harm than what might be inflicted on us.”

Over the next couple of months, Navarro said White House officials plan to have Chinese negotiators back to the U.S. for trade talks.

Subscribe to CNBC on YouTube.


Company: cnbc, Activity: cnbc, Date: 2019-08-09  Authors: kate rooney
Keywords: news, cnbc, companies, week, devalues, white, yuan, action, china, tariffs, currency, strong, trade, tariffschina, trump, navarro, neutralize, peter, stop


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The direction of the US stock market is being determined by China’s currency right now

Source: Koyfin.com(The above chart shows the U.S. dollar-yuan, so an increase in the line means the currency is weakening vs. the dollar.) The yuan came to the limelight after China weaponized the currency in the trade war with the U.S. to retaliate against President Donald Trump’s tariffs. That in turn means the trade war could drag on further and damage the global economy. ET, the People’s Bank of China fixes a level at which the yuan will trade against the dollar within China. Nonetheless, th


Source: Koyfin.com(The above chart shows the U.S. dollar-yuan, so an increase in the line means the currency is weakening vs. the dollar.) The yuan came to the limelight after China weaponized the currency in the trade war with the U.S. to retaliate against President Donald Trump’s tariffs. That in turn means the trade war could drag on further and damage the global economy. ET, the People’s Bank of China fixes a level at which the yuan will trade against the dollar within China. Nonetheless, th
The direction of the US stock market is being determined by China’s currency right now Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-07  Authors: yun li
Keywords: news, cnbc, companies, volatility, right, trade, stock, direction, currency, means, war, yuan, market, bank, china, chinas, level, dollar, determined


The direction of the US stock market is being determined by China's currency right now

Traders and financial professionals work ahead of the closing bell on the floor of the New York Stock Exchange.

At 9:44 a.m. ET, the Chinese offshore currency hit an intraday low against the dollar. Merely two minutes later, the S&P 500 slumped to the low of the day of 2,824.45. Stocks quickly rebounded in the afternoon with the S&P 500 erasing a 2% loss just when the yuan started to stabilize.

Wall Street is obsessed with the yuan right now.

Source: Koyfin.com

(The above chart shows the U.S. dollar-yuan, so an increase in the line means the currency is weakening vs. the dollar.)

The yuan came to the limelight after China weaponized the currency in the trade war with the U.S. to retaliate against President Donald Trump’s tariffs. China on Monday allowed the currency to breach a psychological level — 7 against the dollar — for the first time since 2008, which triggered a deep sell-off with major stock averages suffering their worst days of the year.

The simple explanation is this: If the yuan is falling, it means China is letting it decline to ease the effects of the tariffs and to poke Trump. That in turn means the trade war could drag on further and damage the global economy.

During these wild intraday swings, traders are left searching for answers.

“It’s an extraordinarily frustrating market in that the SPX is swinging several percent in a matter of hours based on no fundamental news,” Adam Crisafulli, a J.P. Morgan managing director, said in a note midday Wednesday.

But a look at the charts shows the yuan was dictating trading on Wednesday and has been the last three sessions. And it may be influencing the move in U.S. bond yields as well.

The currency is now a big driver of market volatility as the rolling three-month daily return correlation between the offshore yuan and the Cboe Volatility Index is at all-time highs, according to Maxwell Grinacoff, a derivatives and quantitative strategist at Macro Risk Advisors.

The VIX, AKA Wall Street’s fear gauge, popped to the highest in 2019 on Monday amid the violent sell-off as the yuan’s level sent shock waves through financial markets.

Every night at 9 p.m. ET, the People’s Bank of China fixes a level at which the yuan will trade against the dollar within China. The central bank last night set the yuan midpoint at 6.9996 per dollar, slightly weaker than expected.

People’s Bank of China insisted that China did “not engage in competitive devaluation. ” Nonetheless, the U.S. Treasury Department declared China as a currency manipulator after letting the yuan break the key level.

–CNBC’s Fred Imbert contributed reporting.


Company: cnbc, Activity: cnbc, Date: 2019-08-07  Authors: yun li
Keywords: news, cnbc, companies, volatility, right, trade, stock, direction, currency, means, war, yuan, market, bank, china, chinas, level, dollar, determined


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How the trade war could take an even bigger chunk out of corporate earnings

The potential currency war is adding to earnings problems. The realization that the trade war may expand from tariff wars to encompass currency wars is causing some consternation among analysts and strategists who are increasingly confused and uncertain on how to determine 2019 and 2020 earnings estimates. Last week, Goldman Sachs cut its 2019 and 2020 numbers, citing lower economic growth, lower oil prices and weaker margins. Nick Raich, who covers corporate earnings at the Earnings Scout, note


The potential currency war is adding to earnings problems. The realization that the trade war may expand from tariff wars to encompass currency wars is causing some consternation among analysts and strategists who are increasingly confused and uncertain on how to determine 2019 and 2020 earnings estimates. Last week, Goldman Sachs cut its 2019 and 2020 numbers, citing lower economic growth, lower oil prices and weaker margins. Nick Raich, who covers corporate earnings at the Earnings Scout, note
How the trade war could take an even bigger chunk out of corporate earnings Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-07  Authors: bob pisani
Keywords: news, cnbc, companies, tariff, currency, estimates, bigger, corporate, lower, trade, war, earnings, analysts, 2019, 2020, chunk


How the trade war could take an even bigger chunk out of corporate earnings

The potential currency war is adding to earnings problems.

The realization that the trade war may expand from tariff wars to encompass currency wars is causing some consternation among analysts and strategists who are increasingly confused and uncertain on how to determine 2019 and 2020 earnings estimates. On Tuesday evening, Citigroup said the overhang of a sluggish economy, trade war threats and potential currency devaluations was enough to make its analysts lower earnings estimates for the S&P 500 for 2019 and 2020 by a little more than 2%.

Last week, Goldman Sachs cut its 2019 and 2020 numbers, citing lower economic growth, lower oil prices and weaker margins. “We expect negative revisions to consensus 2020 EPS estimates in 2H 2019,” Goldman analysts said, though they did keep their price target.

Of course, analysts have long been concerned with the impact of tariffs on earnings. Nick Raich, who covers corporate earnings at the Earnings Scout, notes that estimates have ebbed and flowed with tariff headlines: “In May, when the trade war escalated, earnings estimates dropped, and then in June when the psychology got better they improved,” he said. “They started weakening again last week when Trump tweeted about more tariff wars.”

Raich said it was likely earnings will come down again if concerns about a currency war — a new wrinkle in the trade war— get louder. The Trump administration’s declaration that China is a currency manipulator may be setting the stage for a deeper round of competitive currency devaluations.


Company: cnbc, Activity: cnbc, Date: 2019-08-07  Authors: bob pisani
Keywords: news, cnbc, companies, tariff, currency, estimates, bigger, corporate, lower, trade, war, earnings, analysts, 2019, 2020, chunk


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Cramer on computer traders: ‘Why don’t they go work for NASA’ instead of wrecking markets

CNBC’s Jim Cramer said he was “aghast” at the huge swing between the sharp decline in stock futures Monday evening and the strong Wall Street open Tuesday. The “Mad Money ” host blasted “pajama traders,” the term he coined for those who buy and sell futures contracts, often based on computer algorithms, during market off-hours. Cramer said making investment decisions based on what stock futures are doing outside the regular market session is ill-advised. “It was almost as if it was a huge, huge


CNBC’s Jim Cramer said he was “aghast” at the huge swing between the sharp decline in stock futures Monday evening and the strong Wall Street open Tuesday. The “Mad Money ” host blasted “pajama traders,” the term he coined for those who buy and sell futures contracts, often based on computer algorithms, during market off-hours. Cramer said making investment decisions based on what stock futures are doing outside the regular market session is ill-advised. “It was almost as if it was a huge, huge
Cramer on computer traders: ‘Why don’t they go work for NASA’ instead of wrecking markets Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-06  Authors: jessica bursztynsky
Keywords: news, cnbc, companies, wrecking, futures, dont, work, currency, traders, markets, market, points, instead, dow, stock, huge, nasa, cramer, computer


Cramer on computer traders: 'Why don't they go work for NASA' instead of wrecking markets

CNBC’s Jim Cramer said he was “aghast” at the huge swing between the sharp decline in stock futures Monday evening and the strong Wall Street open Tuesday.

The “Mad Money ” host blasted “pajama traders,” the term he coined for those who buy and sell futures contracts, often based on computer algorithms, during market off-hours.

“Why don’t they just go work for NASA?” Cramer asked, rhetorically, suggesting their computer skills would be better used elsewhere. “Why do they have to wreck our markets?”

After the Dow Jones Industrial Average on Monday tanked 767 points, or 2.9%, on concerns about the U.S.-China trade war turning into a currency battle, Dow futures were down more than 600 points after hours. But early Tuesday morning, they turned positive after China allowed its currency to rise, one day after letting it drop to its lowest level in more than a decade.

Cramer said making investment decisions based on what stock futures are doing outside the regular market session is ill-advised. He said, “Don’t buy up openings, period,” adding that “nine times out of 10, it’s been a fool’s game.”

“I’m still aghast at what happened last night,” Cramer added Tuesday on CNBC. “It was almost as if it was a huge, huge seller who was so wrong.”

“These things colored people’s mind when we left here” after Monday’s market close, he said. “It’s a thin market. The algos were going nuts,” he added, referring to algorithmic computer trading that dominates markets.


Company: cnbc, Activity: cnbc, Date: 2019-08-06  Authors: jessica bursztynsky
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Stocks rebound from worst day of the year—here’s what 4 experts are watching now

The move provided some relief to the markets and eased tensions that a currency war between the world’s two biggest economies was on the horizon. “A lot of people look at this as just a trade war that stepped up a little bit over time. Dan Suzuki, portfolio strategist at Richard Bernstein Advisors, said fears of a currency war were “overblown,” and actually thinks China is a good risk-reward bet. “The market reading into it being a currency war was overdone. You know, I don’t think that this cha


The move provided some relief to the markets and eased tensions that a currency war between the world’s two biggest economies was on the horizon. “A lot of people look at this as just a trade war that stepped up a little bit over time. Dan Suzuki, portfolio strategist at Richard Bernstein Advisors, said fears of a currency war were “overblown,” and actually thinks China is a good risk-reward bet. “The market reading into it being a currency war was overdone. You know, I don’t think that this cha
Stocks rebound from worst day of the year—here’s what 4 experts are watching now Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-06  Authors: araceli crescencio
Keywords: news, cnbc, companies, stocks, think, war, watching, currency, china, weve, yearheres, experts, worst, rebound, day, trade, companies, going, chinese, dont


Stocks rebound from worst day of the year—here's what 4 experts are watching now

U.S. markets recovered from their worst day of the year, after China’s central bank rejected the U.S. Treasury’s classification of the country being a currency manipulator and stabilized the yuan.

The move provided some relief to the markets and eased tensions that a currency war between the world’s two biggest economies was on the horizon.

While the news helped ease market concerns, experts are remaining cautious. Here’s what four experts think comes next:

Ellen Hazen, portfolio manager at F.L. Putnam Investment Management, said the increased tensions may lead the Fed to take more action.

“There is certainly some chance that this most recent ratcheting up of tensions was in some part designed to respond to what you were saying earlier … about the Fed responding to this trade war. But, the results are real. We’ve seen the slowing in the industrial economy here and in other places. And part of that is due to the uncertainty, and the slowdown from the trade rhetoric. So, I don’t know if 50 basis point cut, or even more than that is going to turn that industrial economy around.”

Leland Miller, CEO of China Beige Book International, said if the Chinese government really starts manipulating its currency, it could lose control of the yuan.

“A lot of people look at this as just a trade war that stepped up a little bit over time. But what’s actually happened, is the beginning of the trade war there was tariffs, and those tariffs were dealt with by the Chinese through back door subsidies, through currency depreciation, through other things. So, they were basically counteracted as much as possible. Where we’re going now, is a place where they can’t do this. And if they were trying to do that with the currency, not only would there be a major political reaction, but they could lose control. I think the fear over what the Chinese are doing right now, is not about breaking seven. It’s that now that they’re no longer restrained by seven, this could go anywhere. And once it starts, the Chinese themselves may not be able to stop the fall of the yuan along the way.”

Dan Suzuki, portfolio strategist at Richard Bernstein Advisors, said fears of a currency war were “overblown,” and actually thinks China is a good risk-reward bet.

“The market reading into it being a currency war was overdone. At most, you’re going to get a currency schoolyard fight. I mean, it’s like little moves. They have very little interest in massively devaluing their currency. What happens if they do that? You’re going to see massive capital outflows and they don’t want to see that either. So, I think that directional[ly], you know, if you just pull up the long-term chart for the Chinese yuan, it’s been coming down for the last 10, 20, 30 years. You know, I don’t think that this changes that story. … We’ve raised some cash, but we’ve been lowering consistently our U.S. equity exposure, and we’ve been moving abroad. So we had zero weight in Europe, as an example, last year. We’ve now neutralized that. We’re in roughly equal weight. China, we actually think is a good risk-reward play, because just look at the actual underlying data. There’s trade talks, and then the underlying data for China, is actually starting to improve, at least on a relative basis, relative to everywhere else in the world where it’s getting worse on a daily basis. So, we think that China is probably a best risk-reward bet, given that no one wants to touch that with a ten-foot pole.”

David Kostin, chief U.S. equity strategist at Goldman Sachs, is doubtful that there will be a U.S,-China trade deal in the near future.

“So, what we’re focusing on with clients right now, is a couple of strategies. The first is services compared with goods. So services providing companies, as opposed to goods producers—and that is an important dynamic. In fact, I was on this program a couple months ago talking about [this] as a strategy, and the reason for that is that the companies that are services providing are more domestically facing. They don’t have as much exposure from a tariff point of view. They happen to have better growth in terms of earnings, and they trade roughly at the same valuation. So, if you think about some of those companies, Microsoft at the top of the list, Amazon, we’ve got Google, as examples. Another strategy would be companies that are more domestically facing in terms of the source of their revenue. So, some of the paywall processors. The likelihood of a trade deal has diminished. And we have a trade barometer, that is basically, inferred from what’s happening in the performance of stocks that are Chinese that are selling to the United States, and then vice versa .. it’s at 11 right now. To put in context, it was 75 in April. It’s now 11. OK, the probability of a deal … based on the equity market would be very, very, low.”

Disclaimer


Company: cnbc, Activity: cnbc, Date: 2019-08-06  Authors: araceli crescencio
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China sets its yuan midpoint at stronger than 7 per dollar

That important line is at seven yuan per dollar. In Monday’s Asian afternoon trading hours, the onshore currency changed hands at 7.0304 against the dollar, while the offshore yuan traded at 7.0807 against the greenback. On Tuesday morning, the People’s Bank of China set the yuan fixing at 6.9683. Given the 2% permitted trading band for the yuan, that means the spot rate for the currency against the dollar could rise to 7.1, according to Carnell. Markets around the world are closely watching the


That important line is at seven yuan per dollar. In Monday’s Asian afternoon trading hours, the onshore currency changed hands at 7.0304 against the dollar, while the offshore yuan traded at 7.0807 against the greenback. On Tuesday morning, the People’s Bank of China set the yuan fixing at 6.9683. Given the 2% permitted trading band for the yuan, that means the spot rate for the currency against the dollar could rise to 7.1, according to Carnell. Markets around the world are closely watching the
China sets its yuan midpoint at stronger than 7 per dollar Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-06  Authors: everett rosenfeld
Keywords: news, cnbc, companies, yuans, according, morning, level, dollar, china, yuan, currency, bank, stronger, sets, trading, midpoint


China sets its yuan midpoint at stronger than 7 per dollar

After China’s currency weakened beyond a closely watched level on Monday, the country’s central bank set the yuan’s official reference point at stronger than that point on Tuesday.

That important line is at seven yuan per dollar. In Monday’s Asian afternoon trading hours, the onshore currency changed hands at 7.0304 against the dollar, while the offshore yuan traded at 7.0807 against the greenback.

On Tuesday morning, the People’s Bank of China set the yuan fixing at 6.9683. That was stronger than the 6.9736 that had been expected, according to a Reuters estimate.

Still, it was weaker than the 6.9225 parity level from Monday morning — and it’s the weakest since May 20, 2008, according to Reuters.

“Today’s fix at USDCNY 6.9683 comes close to the estimates published each day by some of those attempting to mirror how the PBoC sets its mid-point relative to its trading partners. But it is nonetheless quite a big move and about double the increase seen yesterday,” Robert Carnell, ING’s chief economist head of research for Asia Pacific, said in a morning note.

Given the 2% permitted trading band for the yuan, that means the spot rate for the currency against the dollar could rise to 7.1, according to Carnell.

“But the moves so far don’t look anything like this big, and it seems that some market participants were expecting the fix today to be even higher, so the actual result is ‘less unsupportive’ than some had imagined,” he added.

Markets around the world are closely watching the yuan’s position against the 7-per-dollar level after the U.S. declared China a currency manipulator on Monday.

Monday’s sharp weakening in the Chinese currency came after U.S. President Donald Trump unexpectedly announced fresh tariffs on Beijing last week, and so the yuan move was widely deemed a response from the Chinese side.

“I think this is clearly a retaliation that in the past China has refrained from doing,” Claudio Piron, co-head of Asia rates and foreign exchange strategy at Bank of America Merrill Lynch Global Research, told CNBC’s on Monday.

The next step after issuing the “manipulator” designation is for the U.S. to make its case to the International Monetary Fund, but that’s not likely to lead to formal penalties. The label is mostly symbolic and matters more as a slight to one of the United States’ biggest creditors and as an escalation in the ongoing Washington-Beijing trade war.

—Reuters and CNBC’s Thomas Franck and Eustance Huang contributed to this report.


Company: cnbc, Activity: cnbc, Date: 2019-08-06  Authors: everett rosenfeld
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10-year Treasury yield steady after breaking under 1.7% in overnight trading

The yield on the benchmark 10-year Treasury note held steady Tuesday morning after breaking under 1.7% earlier in the session for the first time since the fall of 2016. ET, the yield on the benchmark 10-year Treasury note was unchanged at 1.736%, off a low of 1.672% hit in overnight trading. Overnight, the People’s Bank of China set the midpoint for the yuan at a level stronger than the key 7 yuan-to-dollar rate. Many thought the yuan’s depreciation could be an attempt by Beijing to juice its ex


The yield on the benchmark 10-year Treasury note held steady Tuesday morning after breaking under 1.7% earlier in the session for the first time since the fall of 2016. ET, the yield on the benchmark 10-year Treasury note was unchanged at 1.736%, off a low of 1.672% hit in overnight trading. Overnight, the People’s Bank of China set the midpoint for the yuan at a level stronger than the key 7 yuan-to-dollar rate. Many thought the yuan’s depreciation could be an attempt by Beijing to juice its ex
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Company: cnbc, Activity: cnbc, Date: 2019-08-06  Authors: sam meredith
Keywords: news, cnbc, companies, steady, worth, trade, china, 17, treasury, breaking, currency, overnight, yuan, yields, yield, war, set, 10year, trading


10-year Treasury yield steady after breaking under 1.7% in overnight trading

The yield on the benchmark 10-year Treasury note held steady Tuesday morning after breaking under 1.7% earlier in the session for the first time since the fall of 2016.

At around 11:19 a.m. ET, the yield on the benchmark 10-year Treasury note was unchanged at 1.736%, off a low of 1.672% hit in overnight trading. The yield on the 30-year Treasury bond was slightly lower at 2.272%.

The uptick in yields came after China’s central bank indicated that it wants the country’s currency to strengthen against the U.S. dollar. Overnight, the People’s Bank of China set the midpoint for the yuan at a level stronger than the key 7 yuan-to-dollar rate. The yuan breached that level for the first time since 2008 on Monday.

Investors took the announcement from the PBOC as welcome relief from the prior session’s fears that China wouldn’t support the yuan against the greenback in a burgeoning currency war. Many thought the yuan’s depreciation could be an attempt by Beijing to juice its exports and aggravate the trade war between the globe’s two largest economies.

Those anxieties sent the Dow Jones Industrial Average tumbling more than 750 points on Monday as all three of Wall Street’s notched their worst day of the year. The stock onslaught fostered a bid for less risky assets like U.S. debt as yields on maturities across the board sank to multiyear lows.

The angst showed no signs of slowing late Monday after the U.S. Treasury officially designated China as a “currency manipulator, ” following a sharp fall in the value of the Chinese yuan against the dollar.

A protracted trade dispute between the U.S. and China has now dragged on for more than a year. Both countries have slapped additional tariffs on each other’s goods worth billions of dollars, and the escalating tensions have spooked markets and hurt global economic growth outlook.

Late last week, China vowed to retaliate after President Donald Trump threatened to impose a 10% tariff on $300 billion worth of Chinese imports.

On the data front, the latest monthly Job Openings and Labor Turnover Survey (JOLTS) will be released at around 10 a.m. ET.

Meanwhile, the U.S. Treasury is set to auction $38 billion in 3-year notes on Tuesday.


Company: cnbc, Activity: cnbc, Date: 2019-08-06  Authors: sam meredith
Keywords: news, cnbc, companies, steady, worth, trade, china, 17, treasury, breaking, currency, overnight, yuan, yields, yield, war, set, 10year, trading


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This will be Wall Street’s new obsession as the trade war intensifies

ET, the People’s Bank of China fixes a level at which the yuan will trade against the dollar within China. “The new thing people will look at every night is see what the fixing of the yuan is at 9 p.m. People’s Bank of China Governor Yi Gang insisted, however, that China did “not engage in competitive devaluation. ” Nonetheless, the U.S. Treasury Department designated China as a currency manipulator after allowing the yuan to break the key 7 per-U.S.-dollar level. “The currency, on a short-term


ET, the People’s Bank of China fixes a level at which the yuan will trade against the dollar within China. “The new thing people will look at every night is see what the fixing of the yuan is at 9 p.m. People’s Bank of China Governor Yi Gang insisted, however, that China did “not engage in competitive devaluation. ” Nonetheless, the U.S. Treasury Department designated China as a currency manipulator after allowing the yuan to break the key 7 per-U.S.-dollar level. “The currency, on a short-term
This will be Wall Street’s new obsession as the trade war intensifies Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-06  Authors: fred imbert
Keywords: news, cnbc, companies, trade, fears, intensifies, china, obsession, market, night, wall, stocks, currency, yuan, war, shortterm, streets, bank


This will be Wall Street's new obsession as the trade war intensifies

Following Monday’s market meltdown traders will take their cues from the Chinese central bank and where it sets the midpoint for the country’s currency, the yuan, as trade tensions between China and the U.S. increase.

Every night at 9 p.m. ET, the People’s Bank of China fixes a level at which the yuan will trade against the dollar within China. The central bank last night set it at a stronger-than-expected level versus the greenback, helping U.S. stocks rebound on Tuesday from their worst day of the year.

On Sunday night in New York, however, the PBOC let the onshore yuan weaken to its lowest level against the greenback in more than 10 years, sparking fears of China weaponizing its currency in its trade war with the U.S. Those fears sent stocks tumbling across the board and moved the yuan to the top of a long list of variables investors are watching during the U.S.-China trade war.

“The new thing people will look at every night is see what the fixing of the yuan is at 9 p.m. ET,” said Keith Lerner, chief market strategist at SunTrust Private Wealth. “That’s going to drive sentiment from day to day along with headlines coming out of China. People are going to, no pun intended, be fixating on that combination every day.”

China set the yuan’s midpoint at 6.9683 per U.S. dollar on Monday night, stronger than a Reuters estimate of 6.9736. This led to a massive turnaround in U.S. stocks as it temporarily quelled fears of China weakening its currency to stave off the impact of U.S. tariffs on its economy.

The Dow Jones Industrial Average traded about 300 points higher, or 1.1%. The S&P 500 and Nasdaq Composite gained 1.2% and 1.4%, respectively on Tuesday.

Those gains trimmed some of the sharp losses from Monday’s session. The Dow and S&P 500 plunged 2.9% and 2.98%, respectively on Monday while the Nasdaq plummeted 3.5%.

The sell-off was sparked after China allowed its currency to weaken to above 7 per U.S. dollar, stoking fears that Chinese authorities were weakening the yuan as a counter measure to additional tariffs from the U.S.

President Donald Trump announced Thursday a 10% charge would be imposed on $300 billion worth of Chinese imports. That tranche of goods is made up primarily of consumer goods such as apparel and Apple products, including iPhones and computers.

People’s Bank of China Governor Yi Gang insisted, however, that China did “not engage in competitive devaluation. ” Nonetheless, the U.S. Treasury Department designated China as a currency manipulator after allowing the yuan to break the key 7 per-U.S.-dollar level.

“The currency, on a short-term basis, will be a pivot factor in terms of what the market will watch for short-term direction,” said Gregory Faranello, head of U.S. rates at AmeriVet Securities. “The currency, on a short-term basis, will be a pivot factor in terms of what the market will watch for short-term direction.”

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Company: cnbc, Activity: cnbc, Date: 2019-08-06  Authors: fred imbert
Keywords: news, cnbc, companies, trade, fears, intensifies, china, obsession, market, night, wall, stocks, currency, yuan, war, shortterm, streets, bank


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