Daily Agenda: PBOC Lowers Currency Band

In a surprise move, the People’s Bank of China today lowered the midpoint of its currency band to 6.2298 yuan versus the U.S. dollar, 1.85 percent lower than the prior level. In the accompanying news release, the PBOC stated that this reduction was part of a shift towards allowing the band midpoint to be determined by market makers’ quotes and that there would be no further such cuts. Some skeptics point out, however, that the timing of this reform follows the release of extremely weak export data for July. Chinese equities listed in Shanghai and Hong Kong rose on the news, as did three- and ten-year U.S. Treasury futures as investors globally recalibrated risk factors. Kit Juckes, macro strategist at Société Générale in London, wrote in a note to clients this morning that the PBOC now appears to me moving towards a managed float is similar to how the majority of Asian central banks operate. Juckes, warns however, “The technical changes are less eye-catching than the small devaluation, which can only increase speculation that the renminbi will now play catch-up (or catch-down) with China’s major competitors.” If this is the start of anew phase in the currency warsthat have seen the yen and euro slide by double-digit percentages against the dollar, Juckes argues that the domino effect to weaker commodity prices and weaker currencies across emerging markets and resource exporters will be hard to stop.

Google restructures.On Monday Google announced a major corporate restructuring that will lead to the creation of a new parent company called Alphabet and the shift of its search engine and streaming business lines into a subsidiary that will retain theGoogle brand. The move to allow separate business units to work with autonomy will help to lend greater transparency to investors.

FinalGreek dealin sight.经过八个月的谈判，争吵和公共展望，在雅典酒店在23小时课程之后，希腊已经提出了与其欧洲债权人的最终交易，今天宣布了希克里德今天的埃克里德·特罗斯托斯。该协议将在明天早期的议会之前置于希腊议会之前，并将在周五欧元区财政部长投票。

Singapore GDP hits multiyear low.Data released today by Singapore’s Ministry of Trade and Industry confirmed that the country’s economy contracted during the second quarter, though registered a slight improvement over the first estimate at a contraction of 4 percent versus the prior quarter. At an annualized rate of 1.8 percent, this marks the lowest rate of growth since second half of 2012. The entrepôt nation has struggled with sluggish demand from China and in the statement accompanying the data, the MTI highlighted the risks represented by corrections inChinese real estate and stock markets.

德国投资者信心下降。Data released today by the Mannheim–based ZEW Center for European Economic Research indicated that sentiment has weakened among German investors. The ZEW economic sentiment index registered at 25, compared to forecasts for a 32 reading, despite a gain for the current situation-specific gauge.

OPEC production soars.In its monthly production report, theOrganization of Petroleum Exporting Countriesestimated that member states raised production to 31.5 million barrels per day in July, the highest level since 2012. The increase was driven in part by a spike in output by Iran even as the largest producer in OPEC, Saudi Arabia, slightly curtailed production.