"China to the rescue! U.S. stocks surged higher, wiping out their loss for the week, as strength in tech shares pushed the S&P 500 up 1.9% once China's stronger-than-expected yuan fixing reduced fears of a currency war. George Lei explained how Chinese policymakers are sending a clear message that they want a stable currency, and options and forwards traders are getting it."Thing is, and you can take this one to the bank, China not devaluing their currency has -- at this point -- nothing to do with appeasing the U.S., and everything to do with calming foreign investors; who would absolutely bolt if they thought China was about to devalue in a meaningful way.
Thursday, August 8, 2019
China's Not Aiming To "Fix" The U.S. Stock Market
While some outlets reported that the market's strong rally today occurred on essentially no news, which could imply that it rallied on a lack-of-news, Bloomberg's Eric Weiner shares (below) my view that -- other than a raft of short-covering (which was likely huge given the levels breached) -- it (the catalyst, that is) was all about last night's yuan fixing, which China set at a level strong enough to allay growing concerns that a currency war was brewing.
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