FRA Sees All Eyes on US-China Strategic Dialogue Summit in Beijing

The July  FOMC meeting is being framed today in China.

The FRA was fully expecting an “obfuscated” Jobs Report on Friday to give Yellen the time and cover she needed in striking an agreement with China, now that the Shanghai Accord has clearly broken down.

The FRA presently expects a Fed hike in the July FOMC meeting but NOT BEFORE a final resolution on the DEVALUATION OF THE YUAN is agreed to between the US and China.

China has already fired four devaluation salvos across the US bow in the last 4 weeks. China is out of time and patience.

Remember: China is selling FX Reserves held in US Treasuries and are the banker to a continuing rising US debt requirement.

Both a cheaper Yuan and US$ are required – but what is to be debated at the US_China Summit is how?

Disclaimer: The views or opinions expressed in this blog post may or may not be representative of the views or opinions of the Financial Repression Authority.