currencies

Many markets have now recovered from the initial wave of selling associated with the Chinese mini-devaluation catalyst. This should be expected. Some of these markets will surely continue higher. Nevertheless, the Chinese devaluation still…

My base case is that the US stock market correction will not extend to major losses without a U.S.-based economic slowdown. Therefore, as potent as the Chinese devaluation crisis is as a signal for increasing global deflationary pressures,…

After hard selling into Friday’s close in the U.S. and a global selloff in stocks today, it is clear that the Chinese mini-devaluation has begun a crisis, despite the Yuan appreciating for a seventh day. The mini-devaluation is merely a…

By Michael Pettis Last Tuesday the PBoC surprised the markets with a partial deregulation of the currency regime, prompting a great deal of discussion and debate about the value of the RMB. Part of the discussion was informed by a…

For several months now, I have been hearing stories about the risk of capital flight and capital outflows out of China. At the same time, perhaps as a result of these outflows, traders have recently been trading CNY/USD at the upper end of…

Back in March, I was saying that China would be hard-pressed to maintain its dollar peg if a strong dollar persisted. The deflationary pressures in China are simply too large. Today we learned that it has finally succumbed to that pressure…

I know the title of this post has a somewhat alarmist feel to it. However, I think it is the title that best describes the biggest macro theme now unfolding in the global economy. I have been in Grand Canyon country in the southwest of the…

Last week the Fed admitted to having mistakenly made public forecasts by staff economists which suggested that the Fed is indeed on a 2015 rate hike path. As a result, policy divergence is now set to widen, with the result being a bid for…

Now that the Greek crisis has died down, we can return to surveying the global economy for clues as to whether global growth will continue unabated. My sense right now is that the major theme to watch remains policy divergence, with the US…

I am hoping to move away from Greece with this post that sums up my view on the situation. I have always believed Greece would eventually have to exit the eurozone due to the economic strictures imposed upon it. However, until the coming to…