November 7 – Bloomberg (Josephine Lau):

 “China will invest in stronger currencies when diversifying its $1.43 trillion foreign-exchange reserves, said Cheng Siwei, vice chairman of the National People's Congress. ‘We will favor stronger currencies over weaker ones, and will readjust accordingly,’ Cheng said… The dollar is ‘losing its status as the world currency,’ Xu Jian, a central bank vice director, said… Chinese investors reduced holdings of U.S. Treasuries by 5% to $400 billion in the five months to the end of August…”

November 7 – Bloomberg (Tom Cahill):

 “Chinese and Indian crude oil imports will almost quadruple by 2030, creating a supply ‘crunch’ as soon as 2015, the International Energy Agency said. China will replace the U.S. as the world’s largest energy user early next decade and its oil demand will more than double to 16.5 million barrels a day by 2030, led by a seven-fold increase in Chinese car ownership, the IEA said. Together, China and India account for almost half of a projected 55% increase in world energy demand, the IEA estimated… Oil investments of $5.3 trillion will be needed as new sources race slowing output from old wells, the IEA said.”

November 5 – Bloomberg (Adriana Arai and Jose Enrique Arrioja)

: “Mexico’s central bank Governor Guillermo Ortiz said policy makers can do little to stem rising food prices, and future interest-rate decisions will focus on stopping the spread of inflation to wages and other costs. Increases in the price of wheat, milk and other food items pushed Mexico’s inflation rate above the bank’s 2% to 4% target band… ‘There’s little central banks around the world can do to prevent food prices from rising,’ Ortiz…said…”

November 7 – Financial Times (Joanna Chung, Stacy-Marie Ishmael, Michael Mackenzie and Saskia Scholtes):

 “Gary Pollack, an investor in the vast and traditionally safe $2,500bn municipal bond market in the US, is starting to fret about the escalating problems in the credit world. In particular, he is worried about a stream of bad news coming from specialist bond insurers… If the bond insurers were to lose their triple-A rating, it would have widespread repercussions for every security they insure. ‘This is the first time that the credit quality of these institutions is being called into question,’ says Mr Pollack, head of fixed income research and trading at Deutsche Bank Private Wealth Management… The US Treasury and municipal bond markets have historically moved together but they diverged since August when the credit squeeze first flared. Banks have also insured muni bonds through so-called tender option bond programmes (TOBs). These issue short-term paper backed by portfolios of long-term municipal debt. The banks guarantee that, if there are any problems with the underlying portfolio, they will pay back the short-term debt. TOBs have been among those hardest hit by credit worries and two of the biggest are run by Citigroup and Merrill Lynch… ‘TOBs account for the lion’s share of demand in the primary market and people are likely to be more reluctant to commit funds to these structures following the recent losses and volatility,’ says Matt Fabian, senior analyst at Municipal Market Advisors…”