15.08.27 Daily Summary

1. By SocGen, PBOC sold more than 100 bil.USD of UST during last 2 weeks. US treasury yield soaring much higher amid disappointed auctions yesterday would be caused by this with rebounded equity prices as well.
10yr yield increased by 11bps and 30yr yield soared by 13bps despite of dovish comment by Fed's Dudley.
(See another post today, about this)

2. Recently major yield curve position in US treasury market, which is curve flattener, especially in 5s30s, seems to be unwound under declining expectation of Fed fund rate hike. However, how the big bearish steepening market are showing... it was really unexpected... Anyway, is this the timing to enter the curve flattening position as I recommend in yesterday's post?

3. S&P500 index rose 3.9% underpinned by dovish comment of Fed member, Dudley, signaled hike in September would be too early.

4. And, today, SHCOMP index rose more than 5% strengthening upward momentum nearby its closing time...! Let's see the weekly chart of this on the positive cloud...!

5. I like this express, "World Struggles to Adjust to China's 'New Normal'", by WSJ

6. OECD 34 countries' GDP growth in 2Q recorded at 0.4% quarterly lower than 0.5% in 1Q. Lowered data is dependent almost on Japanese contraction by -0.4%. Considering this prospect, is this number lower really? OECD members contribute 60% for whole world output. On the other hand, is this number low? It seems not...

7. Indonesian Finance Minister said U.S. Fed has to raise interest rate now to reduce global uncertainty. This is somewhat interesting because Indonesia is suffered from weakening currency due to strong USD. Indonesian government seems to think current turmoil in domestic financial market is led by the uncertainty, not by fundamental woes from strong USD.

8. In Greece, even before September election is officially called, outgoing Prime Minister Tsipras is facing a growing challenge of splintery party...

9. U.K. survey of retail sales improved in August. Western economies continue to improve very moderately for now, anyway...

10. Overall, the economic indicators are mixed in US. But, actual economy is close to improvement as employment conditions continue to be robust, despite the woes about external uncertainties...
(See another post today, about Durable Goods Orders)

11. So, unless Fed conclude current condition in China as a possible financial crisis, they would want to hike the policy rate soon... What is decided in Jackson Hole meeting? Will they likely ignore current woes from China?