Sell The RMB And Southeast Asian Markets

Germany is desperate to keep Britain in the EU; PBOC tightens overnight rates massively to defend the RMB, and why you should not touch southeast Asian markets.

EU STATE OF THE UNION

Speaking at his annual state of the European Union address, EU President Jean-Claude Juncker says the EU is not at risk from Brexit. However, he warned the UK that "there can be no a la carte access to the single market." He said Brexit negotiations needed to start quickly and the UK could only have unlimited access to the single market if it accepted free movement of people and goods. Meanwhile, Sir James Dyson, the head of the engineering firm that bears his name, says that EU exit will liberate the UK economy.

In other parts of the state of the union speech Mr. Juncker called for a European military force to foster greater defence cooperation. He also championed the “invisible benefits” of the single currency, claiming that the European Central Bank’s low-interest rate policy had saved Eurozone members €50bn in interest payments.

1.  Brexit. 

 a.  The Germans are desperate to keep Britain “in”, regardless of conditionality. This suggests that the British will continue getting access to the EU market, but at a much cheaper cost to them by way of payments to the EU.

b.  Brexit worries were totally overblown. Little real effect on the EU’s economy.

2.  Coordinated defence force.

a.  Juncker should be worrying more about fortifying NATO: the Russian bear merely is hibernating, awaiting his chance to strike a European welfare museum mired in regulations that strangle growth.

b.  Quite why he wants to waste money on creating yet another pet project, aka justification for his highly-paid job, beats me: fortify NATO, instead!

3.  The Euro.

a.  He clearly has no grasp of the Euro, citing some concocted “savings” that have been made by way of lower interest rates….

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The above notes formed part of a RTHK radio show, you can listen to the blog  more

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Gary Tanashian 4 years ago Contributor's comment

Very interesting. I had held AAXJ based on a bullish pattern, before selling recently as I thought it was extended. It'll be interesting to see if this a short-term reaction or something more lasting. Going strictly by the chart, it's got a higher target.