Tuesday, January 24, 2017

Today's Headlines

  • China Raises Medium-Term Lending Rates in Tightening Signal. (video) China’s central bank increased the interest rates on medium-term loans that it uses to manage liquidity, a move analysts say signals its intent to keep a tight rein on leverage in the financial system. The one year Medium-term Lending Facility rate was raised to 3.1 percent from 3 percent and the six-month rate to 2.95 percent from 2.85 percent, the People’s Bank of China said in a statement Tuesday. The monetary authority said the operations injected 245.5 billion yuan ($36 billion) into the financial system.
  • China Small-Cap Stocks Extend January Slump on Liquidity Squeeze. A gauge of China’s small-cap shares slid, extending a monthly retreat, as a liquidity crunch pressured the most speculative part of the nation’s equities. The ChiNext index fell 1.4 percent in Shenzhen, taking its January loss to 5.1 percent. The measure of mostly technology shares has underperformed the large-cap CSI 300 Index this year as funding costs rose and speculation mounted the regulator will accelerate the pace of initial public offerings, already at a 19-year high -- thereby diverting liquidity from existing shares.
  • Toyota Adding 400 Indiana Jobs in $600 Million Answer to Trump. Toyota Motor Corp. will invest $600 million and add 400 jobs at an assembly plant in Princeton, Indiana, weeks after Donald Trump criticized Japan’s largest automaker for its plan to open a plant in Mexico.
  • European Stocks End Four Days of Losses. (video)
  • Goldman Hails Global Rebound as Currie Sees Commodity Demand. (video) Commodities will be supported in the months ahead by a global rebound spanning the U.S., Europe and China that’s buttressing worldwide demand for raw materials, according to Goldman Sachs Group Inc. “We’re seeing a cyclical uptick in global economic activity and that’s driving demand, not only for oil but all commodities,” Jeffrey Currie, head of commodities research, said in Hong Kong on Tuesday. “That’s the core reason why we upgraded our outlook on commodities to overweight,” he said, referring to the bank’s November decision.
Wall Street Journal:
Zero Hedge:
The Telegraph:
  • Fitch warns time is running out for China's debt-driven boom. China is creating credit at twice the pace of underlying growth and is relying on hazardous bubbles to keep growth running far above the safe speed limit, Fitch Ratings has warned. Short-term stimulus is papering over deep cracks in the economy and vital reforms are being neglected, storing up serious trouble for the future.

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