China, yuan & PBoC macro analysis
Frequent insights on RMB policy, PBoC liquidity operations, capital controls and Chinese macro data.
central bank balance sheets are an underrated resource for understanding the global liquidity moves
if you're following my posts - you already know that
rising US bond yields, ruble & gold
falling USD
i've been warning about it for months
90's style data = massive alpha 😂⬇️
central banks will continue to buy gold
you'll be able to confirm that in their upcoming balance sheets reports. pay special attention to China & Russia
enjoy the dip, because smart money is!
central banks will continue to buy gold
you'll be able to confirm that in their upcoming balance sheets reports. pay special attention to China & Russia
enjoy the dip, because smart money is!
🇨🇳China has been increasing their gold reserves YTD
Gold price keeps going up - major central banks continue to load up
Gold is a hedge against USD. Tariffs are a medium of USD weaponization
👉 Expect US securities sell-off for gold by People's Bank of China
🚨 Ruble falls below 82 against USD
I've been writing for a long time about Ruble & the Russian economy, but it's still crazy to watch it play out live
REMEMBER: Russia is still under heavy sanctions, and it's virtually impossible to purchase RUB. Once they're dropped: 📈
Yuan downside party really didn't last 😳
It went up just as fast as it went down
Yuan up + falling yields on Chinese bonds builds a positive outlook for renminbi
The hinted US securities liquidation/purchase pause by Chinese banks also contributed to this
All expected 🤷♀️
Looks like 'lowest renminbi/Yuan since 2008' didn't last long 🤷♀️
Of course, this also gives China leverage - if The People Bank's of China (China's Central Bank) dumps their US Securities in the market, it will skyrocket bond yields, by reducing their prices
Who will lend to the US then, and at what premium? And at 125% debt to GDP 😬
China is the 2nd largest holder of US Treasury bonds - a staggering 23% of their foreign exchange reserves
This makes China extremely exposed to US systemic risk. Which is why tariffs will hit them double hard - at exports and at renminbi/Yuan due to falling #DXY
Not saying they can't sustain it though
