It's Now a Currency War

[errolanderson]

China appears allowing their Yuan devalue. Another tool in their battle against the U.S.

USD surging against G10 currencies. Gold hammered . . . might break $1,200 per oz?

Statements from White House appeared to have enflamed the trade/currency with China overnight.

Grains, hogs caught in-the-crossfire. Mexico/China hog/pork business slows Beef should feel fallout in pork values soon (IMO).

Loonie wobbled . . . . Technicals point lower.

U.S. stock markets again complacent. VIX drops. This will change soon (IMO)

Trade/currency war now appears just at-beginning of opening salvo . . . .

[ajl]

Lets see if I got this straight, China is going to win the trade war by running their currency to zero. OK. China is out of bullets and done. They will not be able to service their $USD denominated debt now so their ability to buy anything at all is diminishing. We will have to find new markets for our exports. US tariffs make even more sense now because if everybody else is too poor to buy US exports, you might as well make something off the imports coming into your country.

[macdon02]

95.16 on DX is my weekly line in the sand. Looks like a turn point on all the macro markets. 510.25 is required on front month chi wheat on close Friday. Anything less and grains are looking like an Oct low

[errolanderson]

China's Yuan dropped 4% against the USD last month, one of the largest monthly declines in history.
By allowing their currency to depreciate, this effectively softens the blow on China's economy making exports cheaper and almost eliminates the impact of Trump tariffs. But the risk is; it could destabilize their financial markets.

The rising USD is now taking a toll on U.S. exports and commodity prices. Crude oil has been in-a-dive of-late. Recent copper weakness is reflecting slowing global economies. Currencies are now being used as weapons in this trade war (IMO) . . . .

[agstar77]

Just remember we all lose in a war. Trade wars are not easy to win.

[AlbertaFarmer5]

Just remember we all lose in a war. Trade wars are not easy to win.

The trouble is that even if one "wins" a trade war, the win is bitter sweet, since the ultimate end result is simply a bigger piece of a reduced over all pie. Is it better to have a small piece of a large, robust, healthy integrated trade, or a small but exclusive piece of a very small pie?

[macdon02]

Snapback in gold .... might be dodging a bullet. Thank you Donald

[Rareearth]

If China can so easily devalue their Uan, why the heck would Canada raise interest rates/ increasing the Canadian dollar?
Kill the economy, jobs, etc. Polots (ex - export bank chief) knows better
Or
Is Canada in step with usa, hanging on the coat tail ( because they have leverage on canada?)

[macdon02]

https://globalnews.ca/news/3641771/sears-canada-pension-plan/

The share of pension plans that wouldn’t be able to meet their obligations regardless of what happens to the parent company is a whopping 73 per cent in Ontario. Quebec could not provide a similar estimate.

If we want to sell govt debt we have to match US rates. Pensions are required to own bonds. They're bleeding to death. Fed has said the rest of the world is on its own, they are normalizing rates for their pension funds.

[farmaholic]

Some of those pension plans were too ****in rich anyway! Oh yeah....and take a higher paying position in the twlight years of the career to pad the pension. For God's sake...have to maintain the lifestyle in the golden years. Make more money sitting at home than some low salaried employees.


Maybe it's time to quit stealing from future generations to support a lavish lifestyle...oh but you "deserve" it!.....Then why didn't you fully fund your own retirement.

[GDR]

https://globalnews.ca/news/3641771/sears-canada-pension-plan/

The share of pension plans that wouldn’t be able to meet their obligations regardless of what happens to the parent company is a whopping 73 per cent in Ontario. Quebec could not provide a similar estimate.

If we want to sell govt debt we have to match US rates. Pensions are required to own bonds. They're bleeding to death. Fed has said the rest of the world is on its own, they are normalizing rates for their pension funds.

So I guess it has to start somewhere for higher rates. I would assume that pension funds would hold a large portion of long term bonds, higher interest rates will actually make them worth less. On the opposite side, I assume Gov debt has a mix of maturity terms and will take a few years to really feel the increase, perhaps about the time of a new governing party left to do the dirty work of balancing the books

[farming101]

95.16 on DX is my weekly line in the sand. Looks like a turn point on all the macro markets. 510.25 is required on front month chi wheat on close Friday. Anything less and grains are looking like an Oct low

ZWU18 is 510.75 @ 9:57 eastern
Keep powder dry

[macdon02]

ZWU18 is 510.75 @ 9:57 eastern
Keep powder dry

Done deal as far as the turn being made imo. This rally is gonna take some patience but it'll be worth it. Expect ALL markets to reverse trend