MODERN TIMES: Stimulus, 0% interest rates, Currency devaluations- CNY devalues by 1.9%
QUOTE: "Life's under no obligation to give us what we expect."
MARKET PULSE

  • The People's Bank of China reduced the CNY's reference by 1.9 %,
  • China exports shrank 8.3 % from a year earlier in July.
  • The CNY slumped 1.9 % to 6.3220 a USD in Shanghai
  • China weakened the CNY's daily reference rate by the most in 20 years
  • Greece sees bailout within reach as Germany says deal desirable
  • Russia's GDP shrinks 4.6% as oil slump risks deeper recession
  • Norway's PM pledges stimulus to limit shock
  • Singapore trims growth forecast after GDP fell last quarter
  • Nomura is said to cut 60 jobs in London focused on fixed income
  • Goldman Sachs Group Inc. has forecast gold will probably drop below $1,000
  • Holdings in Gold ETPs fell for the 17th time in 18 days on Monday to a 2009 low
  • Gold assets shrank by 70.3 MT in gold ETP or 4.4 %
  • RBI bought net $565m of foreign currency in June


INR
MARKETS

  • Rupee falls 0.4% to 64.1250 per dollar
  • 1-month implied volatility rises 61 bps to 6.2075%; avg. for 12M is 6.6706%
  • Rupee 1-month forwards drop 0.5% to 64.45 per dollar
  • USD/INR pivot point at 63.8417
  • USD/INR support at 63.7659, 63.6617 and 63.4817
  • USD/INR resistance breached at 63.9459, 64.0217, next at 64.2017
  • USD/INR MACD crosses above signal line, is also above zero

FACTORS

  • Global investors bought net $18.8m of Indial stocks
  • RBI bought net $565m of foreign currency in June
  • India leading stock index Sensex fell 0.5% yesterday
  • The People's Bank of China reduced the CNY's reference by 1.9 %,
  • China exports shrank 8.3 % from a year earlier in July.
  • The CNY slumped 1.8 % to 6.3220 a USD in Shanghai


FOREIGN EXCHANGE
MARKETS

  • USD/JPY +0.06% at 124.70 (range 124.52-124.89)
  • EUR/USD -0.36% at 1.0979 (range 1.0970-1.1032)
  • AUD/USD -1.12% at 0.7330 (range 0.7307-0.7440)
  • USD/CAD +0.60% at 1.3079 (range 1.2996-1.3102)
  • GBP/USD -0.17% at 1.5565 (range 1.5559-1.5602)
  • USD/CHF +0.09% at 0.9846 (range 0.9822-0.9859)

FACTORS

  • U.S. Treasuries rise across curve, with 10-year yield down 4 bps at 2.189%
  • Brent crude, gold and copper slide
  • Today: Germany's ZEW survey
  • China weakens CNY reference rate by 1.9%, most on record
  • PBOC to improve pricing mechanism for CNY/USD fixing
  • Greece sees bailout within reach as Germany says deal desirable
  • Russia's GDP shrinks 4.6% as oil slump risks deeper recession
  • Norway's PM pledges stimulus to limit shock
  • Singapore trims growth forecast after GDP fell last quarter
  • Nomura is said to cut 60 jobs in London focused on fixed income


GOLD
MARKETS

  • Gold spot lost 1 % to $1,093.95 and wat at $1,099.23 in Asian hours
  • Gold rose to $1,109.08 Monday, (July 21 High) Gold has fallen 7.2% this year
  • Gold December contract fell as much as 1 % to $1,093.30
  • Silver spot fell 0.2 % to $15.22

FACTORS

  • China weakened the CNY's daily reference rate by the most in 20 years
  • Goldman Sachs Group Inc. has forecast gold will probably drop below $1,000
  • A rally in Chinese gold equities as their cost of production in CNY declines
  • Holdings in ETPs fell for the 17th time in 18 days on Monday to a 2009 low
  • Gold assets shrank by 70.3 MT in gold ETP or 4.4 %