We noted last week, improving conditions in the euro area money market, which continued this week as falling overnight rates below 0.70% for the first time in three weeks. It also allowed the 3-month Libor to fall for the first time in about six weeks, spread over the equivalent 3-month rates - to fall for the first time in five weeks. This is important as the expansion of spreads on interest rates in favor of the euro was a key factor supporting the single currency, so that further rate cuts may force the euro against the decline, especially if the appetite for risk will increase after the Fed decision.
Unproductive PMI China and India. Both releases were not far from recent levels. In China, marked to roll back to 60.5, which coincided with an average level over the past six months. The index for India has not held up to a six-month average of approximately three points, having appeared on 56.2, but still a very strong data.
China's baby steps for convertibility of the yuan gaining momentum. We talked earlier about the steps taken by officials in this country to gradually increase the convertibility of the yuan. This week, China has allowed the Monetary Authority of Hong Kong (Hong Kong Monetary Authority) license to invest in stocks and bonds for the yuan. At the level of reserves (more than 250 billion dollars), is a serious step. Moreover, further data from the NSC have shown that the volume of payments in renminbi rose sharply in the third quarter, tripling compared to the second. This means that the total trade in yuan in the second quarter was slightly below the $ 19 billion.
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