David Fuller and Eoin Treacy's Comment of the Day
Category - General

    Saudi Arabia Says Days of Unconditional Foreign Aid Are Now Ove

    This article from Bloomberg confirms what I was hearing at the Future Minerals Forum last week. Here is a section: 

    As part of its deal with the IMF, Egypt agreed to shrink the footprint of all state-run enterprises, including “military-owned companies,” and committed to allow for a more flexible exchange rate.

    “We are also looking at our region, and we want to be a role model for the region,” Al-Jadaan said. “We are encouraging a lot of the countries around us to really do reforms,” he said.

     

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    BOJ Jolts Financial Markets But Risk of a Bigger Shock Remains

    This article from Bloomberg may be of interest. Here is a section: 

    The Bank of Japan’s decision to keep its settings unchanged Wednesday gave global investors a modest jolt, leaving markets from the yen to Treasuries at risk from a potentially larger shock if officials opt to shift policy in the future.

    Standing pat caught some traders by surprise, but it’s unlikely to douse speculation that the BOJ will normalize policy as inflation in Japan accelerates and Governor Haruhiko Kuroda nears the end of his term. It suggests just a temporary setback to bets on a stronger yen and a bond selloff as analysts say it’s still a question of when — not if — the central bank exits its yield-curve control policy.

    Indeed, while Japan’s currency at one stage slumped more than 2% against the dollar in the wake of the decision, it clawed back some ground as the session proceeded, helped by a swath of US economic data that dented the greenback. Japanese government bonds surged as traders covered short positions and stocks pushed higher. US Treasury yields declined.

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    Email of the day on the US debt ceiling

    Thanks for the interesting comments about Saudi - I spent a couple of years working in Riyadh in the late eighties.

    On a different subject do you see the re-occurrence of the US debt ceiling with the Senate's inability to pass (anything...) creating any problems?

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    Email of the day on rare earth metals

    I have just read that in Arctic Sweden they have just discovered Europe's largest source of rare earths. It will take 10 to 15 years to bring them to market. 

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    Email of the day on lumber

    I just wondered whether you had any thoughts on Lumber given the recent price action? Thanks and keep up the excellent work, I'll definitely be renewing my annual subscription (as I have been for more years than I care to count!)

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    Rupiah Rallies to Lead EM Currencies Higher on Slower Rate Bets

    This article from Bloomberg may be of interest to subscribers. Here is a section:

    The Indonesian rupiah is leading a rally in Asia’s emerging-market currencies as bets grow that the US will slow rate hikes, bolstering risk sentiment. 

    The rupiah gained as much as 1.3% against the dollar, the most in more than two months, while the baht climbed more than 1% to its highest level in about 10 months. Most Asian currencies are stronger. 

    Easing inflationary pressures in the US have raised expectations of a smaller rate hike in the upcoming meeting of the Federal Reserve, while optimism over China’s reopening has also brightened the outlook for some of the regional currencies.

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    BOJ Opens 'Pandora's Box' for Traders on Alert for Another Shock

    This article from Bloomberg may be of interest to subscribers. Here is a section:  

    Investors are on high alert for further policy tweaks from the Bank of Japan this week after December’s shock decision to raise the bar on yield movements failed to significantly improve market liquidity.

    While almost all economists surveyed by Bloomberg expect no change at the two-day meeting finishing Wednesday as their main scenario, market pressure on the central bank’s stimulus framework has intensified since last month’s efforts to ease the side effects of policy.

    Another increase in the ceiling for the 10-year yield is seen as the most likely course of action, should the BOJ act, given its recent emphasis on improving bond-market functioning. 

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