China halted natural sand exports to Taiwan and some fish and fruit from the island on Wednesday following US House Speaker Nancy Pelosi’s arrival on the island. The sand export announcement, made in a statement by China’s Ministry of Commerce, said the move was based on provisions of related law but gave no further details. China’s General Administration of Customs said in a separate statement that the suspension of imports was due to excessive pesticide residue detected “multiple times” on products since last year, as well as on some frozen fish packages that tested positive for coronavirus in June.

함의: 중국의 전형적인 무역 제재 수단인 '바이러스 검출'을 사유로 대만의 생선 및 과일에 대한 수입을 중단함.

Beijing announced six exclusion zones encircling Taiwan to facilitate live-fire military drills from Thursday to Sunday. Some of the areas cross into the island’s territorial waters, threatening to disrupt airline traffic and shipping in the Taiwan Strait -- one of the world’s busiest trade routes. Early Wednesday, state broadcaster China Central Television said the country had launched joint navy and air force exercises around Taiwan. The operations will include “regular-guided fire testing in the eastern waters” -- or missiles -- off Taiwan, the PLA said. 

함의: 목요일부터 일요일까지 대만을 둘러싼 6개 지역서 중국의 군사훈련이 시행되며, 일부 항공 및 해운 항로가 통제 범위에 포함됨.

Taiwan Turmoil Prompts Detours, Delays for Global Shipping. China’s announcement of military drills around Taiwan as US House Speaker Nancy Pelosi visits the island is creating ripple effects across global supply chains, prompting detours and delaying energy shipments. Gas suppliers are rerouting or reducing speed on some liquefied natural gas vessels currently en route to North Asia, according to people familiar with the matter. Shipments to Taiwan and Japan this weekend will be affected, said the people, who requested anonymity as the information isn’t public.

함의: 중국이 미국에 대한 강경한 대응의 일환으로 군사훈련을 발표하자 LNG 운반선들이 운항 속도를 줄이거나 경로를 우회하며 물류 지연의 신호가 나타나고 있음.

Electricite de France SA said it’s likely to make further cuts to its nuclear reactor output as scorching weather pushes up river temperatures, bringing the energy crisis in the European Union’s second-largest economy into sharp focus. The French utility said late Tuesday that power stations on the Rhone and Garonne rivers will likely produce less electricity in the coming days, while there will be a minimum level of output to keep the grid stable. A heat wave is pushing up river temperatures, restricting the utility’s ability to cool the plants. The restrictions threaten to further push up power prices, which climbed to record levels in France and Germany on Tuesday. Europe is suffering its worst energy crunch in decades as fallout from Russia’s invasion of Ukraine drives a surge in natural gas.

함의: 러시아로 인해 에너지 수급에 어려움을 겪는 중에 원자력 발전도 큰 도움이 되지 못할 것, 이상기후로 강의 온도가 상승해 플랜트 냉각이 용이치 않아 안정적인 그리드를 유지하려면 오히려 가동률을 낮춰야 한다고 함.

The rally in stocks since June’s low has been built on shaky foundations and, according to many market watchers, a key ingredient for a solid base is still missing -- more cuts to earnings estimates. An analysis of the past four recessions by Bank of America Corp. showed that the S&P 500 Index bottomed only after earnings per share forecasts had fallen either to or below the level they were at when the market last peaked. Fast forward to now -- while projections have fallen, they are still about 6% higher than at the time of January’s all-time record. “We’re still in the very early innings of the downturn and estimate cuts,” Bank of America strategist Savita Subramanian said. “Was June the big low? Our bull market signposts say no.”

함의: 불안정한 상태에서 쌓아올려진 지수가 저점을 지났는지 논하려면 한 가지 조건이 부족한데, 과거 사례 분석을 통하면 하락 전 지수 최고점에서 형성 된 이익추정치보다 현재 이익추정치가 더 낮아져야 한다는 것(지금보다 추정치 하향이 더 필요)임.

The three-month London interbank offered rate for dollars climbed to a nearly 14-year high as traders brace for steady interest-rate hikes from the Federal Reserve, backing away from speculation the central bank will ease up as the economy shows signs of cooling. The Libor rate rose for the fourth straight session, climbing roughly 2.5 basis points to 2.83%, the highest since November 2008. The spread of Libor over overnight index swaps was unchanged at 17.9 basis points. The move follows Tuesday’s surge in Treasury yields after several Fed policy makers’ indicated that they’re not close to done fighting inflation, prompting traders to reduce bets on rate cuts next year. Fed swaps are pricing about 60 basis points of additional hikes for the September meeting, indicating some expectations the central bank will enact another three-quarter-point move at its next gathering. 

함의: 중앙은행 정책 입안자들의 인플레이션 통제 의지를 확인한 뒤 리보금리는 2008년 이후 최고 수준까지 상승, 9월에도 또 한 번의 75bp(현재 60bp)를 책정하고 있음.

Services ISM as Close to Goldilocks as It Gets These Days. Oh my! That’s quite a beat from the services ISM, printing 56.7 versus an expected 53.5, and perhaps dispelling a bit of the recession gloom swirling around.

"You know more than you think you know, just as you know less than you want to know."

- Oscar Wilde

US stocks snapped a two-day decline, climbing on buoyant corporate earnings and solid economic data. Tech led the way, pushing the Nasdaq up 2.6% and the S&P 500 1.6%. Bonds were mixed as traders priced in more Fed tightening, sending 10-year yields down to 2.7% and 2-years up to 3.07%. The dollar was mixed, with the yen lower and the Aussie higher. Oil fell to a six-month low amid a poor demand outlook, while gold advanced. Asian equity futures are in the green.

The US junk bond market is forecasting that the economy may weaken, but won’t tip into a recession. It comes as Federal Reserve officials vow to continue to fight inflation aggressively, even if higher rates increase the risk of recession. And some strategists and money managers think credit markets aren’t paying enough attention to how bad the potential upcoming downturn could be. But for now, investors are voting with their dollars. High-yield bonds gained 5.9% in July, their biggest one-month rally in a decade, and have also been rising in August, according to Bloomberg index data. Risk premiums for the bonds stand at levels not usually associated with recessions. Stocks, junk bonds, and other risk markets rallied in the second half of July as investors grew more hopeful that signs of slowing growth would translate to the Fed easing up on its plans to tighten the money supply.  

함의: 고수익 채권과 국채 간 금리차이는 중앙은행의 강경한 입장과 달리 경기둔화는 있어도 침체는 없다고 말하는 수준에 있음.

Asia’s chip giants are falling behind in a share-price rally staged by their global peers over the past month, and that divergence is unlikely to narrow easily. The region’s dominance in memory chips used for smartphones makes Asian firms particularly vulnerable to weakening global consumption. US-China tensions are also giving firms, especially those in Taiwan, the added complication of navigating a political standoff between the world’s two largest economies. Since the end of June, the Philadelphia Semiconductor Index -- a majority of which are US firms -- has gained about 16%, bottoming out as extreme fears over the Federal Reserve’s tightening eased. In contrast, the Bloomberg gauge of Asian semiconductor shares has risen just 3.5%, an unusually large performance gap.

함의: 채찍효과의 끝자락에 있는 국가에서 나타나는 일, 다만 확대 된 격차가 지속되는 것은 드문 경우임.

From supply anxiety to inventory overhang: In our research, we noted that investors should mind the bullwhip effects, which can occur given "orders had surged amid anxiety about sourcing product, thus inflating backlogs and setting the scene for a sharper-than-expected short-term unwind, particularly for consumer electronics and segments facing demand destruction risk."

함의: 투자자는 항상 채찍효과를 염두해야 함. (Morgan Stanley - Supply Chain Chokepoint Tracker and Inflection Monitor: Bullwhip Effects Broadening)

Asia’s emerging economies are drawing on large foreign exchange reserves to help prop up their currencies rather than going all-out with interest-rate hikes. India, Thailand and Korea have seen their reserves drop by a combined $115 billion this year as they sold dollars to curb currency declines. While most central banks in Asia are also raising rates, economists see this aimed more at tamping down inflation than narrowing the rate differential with the Federal Reserve.
The hope in the region is that a relatively slow and shallow hiking cycle will be enough to keep a lid on price gains without sending economies into reverse. “Emerging-markets Asia central banks are arguably less willing to indulge in competitive hikes,” said Vishnu Varathan, head of economics and strategy at Mizuho Bank Ltd. in Singapore. “The build-up of FX reserves provides some scope for these central banks to exploit this as a means to backstop currencies and contain imported inflation.”

함의: 신흥 아시아 국가들은 금리인상을 통해 선진국과 정책금리 격차를 줄이려는 방법보다 외환보유고를 활용해 자국통화 절하를 방어하고 간접적으로 인플레이션을 완화하는데 활용하고 있음.