Thu, Jul 18, 2019 @ 04:41 GMT
China announced to cut RRR by 100 bps, effective October 15 and applicable to all types of banks, including large commercial banks, joint-stock banks, city commercial banks, non-county rural commercial banks, and foreign banks whose current RRR stand at...
PBOC announced last Friday to impose 20% reserve requirement ratio (RRR) on onshore (CNY) FX forward transactions. Despite the central bank’s denial, the move is obviously to moderate recent sharp depreciation of renminbi. Such measure was implemented on October...
China’s GDP expanded +6.4% y/y in 1Q19, same pace as 4Q18 but beating consensus of +6.3%. Major macroeconomic data showed strong rebound in March and exceeded expectations. Over the past weeks, data flow in China has already signaled improvement...
The official manufacturing PMI data, published by the National Bureau of Statistics, slipped -0.3 point to 49.2 in February. The market had anticipated no change from the prior month. This shows that large corporations in the sector, staying in...
Renminbi’s depreciation since April this year has accelerated over the past two months. While USDCNY has in aggregate rallied over +6% in June and July, renminbi’s weakness was less pronounced against a basket of currencies. The CEFTS index, the...
We expect the slowdown in China’s economic growth would be increasingly evident in coming months, reflecting the rapid moderation in credit growth in the first half of the year. PBOC left its policy rate unchanged, although FOMC lifted the...
Ongoing trade war with the US is accelerating the slowdown in growth in China. As such, the monetary policy adopted by PBOC would continue to be accommodative. Echoing the rhetoric of the annual Central Economic Work Conference, PBOC affirmed...
Yesterday, PBOC announced a -50 bps reduction in reserve requirement ratio (RRR) for commercial banks. The move, effective from July 5, aims at easing the tightening in credit condition with the injection of about RMB 700B of liquidity to...
PBOC has aggressively increased market liquidity. In the form of reverse repo operations, the central bank announced Wednesday that a total of RMB 570B would be pumped to the market. With RMB 10B of previous reverse repo maturing, the...
PBOC announced to adopt targeted RRR cut in 2018 in some banks to 'encourage inclusive financing, such as credit support for small and micro-sized enterprises (SMEs), startups and agricultural production, as well as small business owners, impoverished groups and students. All of the large and medium sized commercial banks, 90% of municipal commercial banks, and 95% of agriculture commercial banks are eligible for this measure. Banks with inclusive financing exposure higher than 1.5% of loans would be eligible for 50 bps RRR cut from benchmark ratios. Banks with exposure higher than 10% would qualify for additional 100 bps RRR cut. We believe the move is a fine-tuning of PBOC's other tightening measures, rather than a shift towards a loosening monetary stance. Indeed, by choosing a targeted RRR cut, instead of a broad-based cut or a rate reduction, the central bank is sending a signal that it has not changed the monetary policy stance which remains 'prudent and neutral”.
Despite the mixed headline readings, China's macroeconomic data in May were in line with our view that the country's economy continues to slow. Growth in industrial production fell to 5% y/y, missing consensus of , and April's, 5.4%. IP growth...
The US-China trade war continues to evolve. The upcoming important event would be the G-20 summit on June 28 and 29. US' Donald Trump has recently noted that he expects to meet China's Xi Jinping, or would impose 25%...
The latest set of macroeconomic data for China shows signs of stabilization. This could be attributed to the government's expansionary policies both monetarily and fiscally. While the government is expected to add more stimuli this year, the challenge remains...
Market sentiment improves further as Trump sent more hints on trade truce extension and “substantial progress” on striking a trade deal with China. Indeed, his indication that a deal on “currency manipulation” has send renminbi (Chinese yuan) to the...
China’s economic growth decelerated further in 3Q18, as the impacts of restraining infrastructure investment and trade war surfaced. GDP growth moderated to +6.5% y/y in the third quarter, the slowest since the first quarter of 2009. Growth came in...
July’s data showed that China’s economic growth continued to decelerate although the government has loosened its policy. All key economic activity indicators missed expectations for the month. Industrial production grew +6% y/y, after a sharp slowdown in June and missing...
Over the past months, US trade policy has been a major cause of the wax and wane of the financial markets. The White House has triggered a number of investigations under the rarely used 1972 US trade law since...
Inflation Headline CPI in China climbed +0.1 percentage point to +1.9% y/y in June, in line with expectations. On monthly basis, inflation contracted -0.1%, compared with consensus of a +0.1% increase. Yet, this is the smallest contraction since March this...
Weakness in renminbi has accelerated recently, driven by Donald Trump’s new list of tariff against China announced in mid-June, PBOC’s RRR cut and the jump in risk aversion over the Chinese market. USDCNY’s rally of more than +4% over...
China’s White Paper, entitled “China's Position on the China-U.S. Economic and Trade Consultations” on recent escalations of trade war has weighed on the fragile market. While the majority of market participants judges that China has opted for a hardliner...
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