After being closed Monday, the Shanghai index, responding to the PBOC’s step over the weekend to further tighten policy, fell 1.2% to the lowest level since Sept ’09. The market is now down 13.5% ytd and is lower for the 11th of the past 13 trading days. Also impacting the action was the release of the Chinese private sector weighted manufacturing PMI which fell to the lowest since Oct ’09 and copper is falling to the lowest level since late Feb. I continue to talk about this weak Chinese market action because I continue believe it is the most important country in the world in terms of its economic influence on the fastest growing part of the world. China’s biggest trading partner, the Euro region, is taking it on the chin once again as people realize the EC/IMF help for Greece may not be enough. PIIGS debt are trading lower as are all stock markets in the area. As expected, the RBA hiked rates again to 4.5%, now up 150 bps off the low in Sept ’09.
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