Zero Hedge — China Yuan and Oil

So what happened today? Well, the PBOC has just U-turned, and has given a greenlight to the same FX speculators whom it criticized (remember the Chinese anti-Soros media campaign), slammed, punished, and in some cases arrested, to now short the Yuan once more.

On the surface, this is a brilliant solution to Beijing's problems: it lowers the Yuan on one hand, and on the other, it's not the PBOC who is manipulating the currency, it's the evil speculators who are "guilty."…

Now the question, of course, is how long will the PBOC allow this move to continue before it once again pulls out the rug from under the "speculators" feet with a well-timed FX margin hike to 100% or more, crushing all shorts, and reseting the cycle. 

Zero Hedge
Yuan Tumbles After Beijing Gives Speculators Green Light To Short The Currency

WTI crude is suddenly tumbling. While it's unclear of the specific catalyst (storms outweighing most other events), desk chatter suggests it is due to a story in The FT that China is striving to reduce capacity of its 'teapot' oil refineries - thus cutting demand notably.

The important line:

“The government does not want dozens of refineries running at 40-50 per cent capacity,” said Erica Downs, the author of the report.

“Beijing is correcting a course for an industry that has gotten out of control.” 

Crude Is Getting Slammed After China Headlines

Tyler Durden

China is cleverly controlling the levers. The liberal West either scoffs that a command system can work, or else complains of government interference in markets when it does.