FOMC: Volatility Gatekeepers To Pass Judgement

China stepped up its campaign to rein in raw materials prices by expanding its oversight of commodities trading by state firms to overseas markets, and pledging to release the nation’s reserves of base metals.

The State-owned Assets Supervision and Administration Commission has ordered state enterprises to control risks and limit their exposure to overseas commodities markets, according to people with knowledge of the matter. The companies have been asked to report their futures positions for Sasac to review, said the people, who asked not to be identified because the information is confidential.

The National Food and Strategic Reserves Administration will soon release state stockpiles of metals including copper, aluminum and zinc, the agency said in a statement Wednesday. The metals will be sold in batches to fabricators and manufacturers.

China’s crackdown on shadow banking is taking aim at more than $1 trillion of opaque investments sold by banks as low risk and high yield, even while funds were channeled to riskier borrowers such as developers.

Banks and wealth mangers can no longer use money invested in so-called cash management products to buy long-term debt or bonds rated below AA+, according to long-awaited rules published on Friday. An estimated 2.5 trillion yuan ($390.5 billion) of the products are currently invested in assets that will soon become non-compliant, and need to be swapped for lower-yielding, high quality investments by the end of next year.

A federal judge in Louisiana issued a preliminary injunction blocking the Biden administration from pausing new oil and gas leases on federal land.

Judge Terry A. Doughty of the U.S. District Court in Monroe said the administration doesn’t have the legal right to stop leasing federal territory for oil-and-gas production without approval from Congress.

The judge, appointed by former President Donald Trump, also said that states suing the federal government—largely southern and coastal states—will be harmed immediately as the pause prevents them from collecting lease bids and bonuses from oil-and-gas prospectors.

The suit was filed by the states of Louisiana, Alabama, Alaska, Arkansas, Georgia, Mississippi, Missouri, Montana, Nebraska, Oklahoma, Texas, Utah and West Virginia.