China Trade Balance & SALT Conference Starts
Interestingly, U.S. Treasury Secretary Timothy Geithner and Chinese Vice Premier Wang Qishan are meeting in Washington D.C. today to discuss strategic and economic issues. Certainly the need to appreciate the yuan faster will be discussed. However, back in China, the central bank is considering its first 3-year note auction in five months, a move that would suggest the recent liquidity draining process will near completion in the next few months.
Overall, slowing imports provide the best evidence that Chinese tightening measures are working. However, fears for a China "hard landing" remain unfounded to date. An orderly "soft" landing is apparent based on declining imports data from March to April:
• Iron ore imports declined 21.8%
• Copper imports declined 12.0%
• Crude oil imports increased 5.2%
• Fertilizer imports increased 29.6%
• Refined oil imports declined 19.1%
Finally, the 2011 SALT Conference begins this evening. Last year's event provided an excellent read on the sentiment of Institutional money managers. I expect to gain similar insight this year.
Over the next week I will share conference highlights and happily violate the Vegas rule: "When it comes to valuable investing information, I will not allow what happens in Vegas to stay in Vegas."