Business

After several months of significant reserves liquidations by China (specifically by its Euroclear proxy "Belgium") which tracked the drop in China's reserves practically tick for tick, in October Chinese+Belgian holdings were virtually unchanged according to the latest TIC data, as China moderated its defense of its sliding currency. Of course, putting this in context still shows a China which has sold $600 billion of US paper since 2014, as this website was first to note over half a year ago.

Following last week's huge draw, total crude inventories were expected to drop 1 million barrels this week driven by expectations that refinery utilization rose last week. When API reported a hugely surprising 2.3 million barrel build, crude prices, which had drifted off highs after NYMEX close, dropped further as disappointment set in, back under $37.

A majorly unexpected build...

Ansd crude prices slumped back under $27...

Charts: Bloomberg

“The Fed is in total denial. It hasn't learned the lessons of what it put the world through a decade ago,” Stephen Roach said, back in January.

“I just go back to 2005 and 2006 where the Fed was so incremental in normalizing rates during a time of enormous froth in property markets, equity markets, credit markets and ultimately that led to huge distortions in the real economy and finally when the bubbles popped, the whole house of cards came down,” he added.

Artist's impression of The Fed statement and press conference tomorrow...

Stocks, Crude, and USDJPY were loving it...

Cash stock indices gapped open then went nowhere...

Submitted by Lance Roberts via RealInvestmentAdvice.com,

This week, the Fed will meet to decide the “fate of the universe,” as they are highly anticipated to announce the first rate hike in a decade. This is a momentous occasion as it marks the end of the “ultra-accommodative” monetary policy that has been the primary driver behind asset prices since the end of the financial crisis as shown in the chart below.