Submitted by Gordon Johnson of Axiom Capital
CREDIT LEADS “ALL OTHER” ECONOMIC DATA IN CHINA
China until recently euphoric credit growth, is rapidly grinding to a halt. As we published last week, and a key underpinning of our negative outlook on commodity prices through the remainder of 4Q17 and into 2018, the moderation in China’s credit seen more recently appears to be gaining momentum. The evidence?
Another day and another Indian inflation reading comes in “hotter” than markets expected. Yesterday, India’s CPI printed at 3.58% for October 2017 - its highest level in seven months - versus the consensus expectation of 3.43%. The September 2017 reading was 3.28%, itself marking a strong rebound from the recent low of 1.46% in June 2017. Market chatter was that the prospect for a rate cut by the Reserve Bank of India (RBI) when it meets on 5-6 December 2017 was fading.
Following last night's dismal economic data, China's 10Y bond yield pushed above 4.00% for the first time since October 2014...
As China's intentional credit slowdown strikes.,,
Additionally, China's yield curve has been inverted for a record 22 days and analysts are warning it is likely to get worse - at least until Chinese authorities are forced to step back in.
Bloomberg provides a breakdown of analysts' comments:
Authored by Axel Merk via Merk Investments,
Last week, I got several calls asking me how U.S. tax reform will impact the price of gold. If you can answer this question, you might be able to answer how tax reform will impact other assets. Let me explain.
Earlier this morning the New York Federal Reserve released their quarterly consumer credit report which detailed, among other things, delinquencies rates on every type of consumer debt from mortgages to student loans.