Blogs

<p>The market was surprised to see that PBOC left the loan prime rate (LPR), its latest benchmark rate, unchanged in October following two consecutive cuts in the prior two months. Yet, this came in line with our expectations that elevation inflation could retrain PBOC from extending monetary easing. Recall that on August 17, PBOC announced [

<p>Headline CPI in China rose to +3% y/y in September, reaching PBOC’s target for first time since December 2013. However, this was driven by elevated pork price rather than improvement in household spending. Food price jumped +11.2%, accelerating from +10% in August. This was predominantly driven by pork price which soared +69.3% y/y in Sept

<p>China’s macroeconomic indicators showed significant weakness across the board. Industrial production gained +4.4% y/y in August, easing from +4.8% in the prior month. The growth rate came in weaker than consensus of +5.2% and marks the slowest in over 17 years. The rapid slowdown was partly driven by the cutback of production ahead of Octo

<p>China announced that 16 types of US exports will be exempted from tariff. While this may be a gesture ahead of the October trade negotiation, we view this as a sign of further weakness in china’s economic outlook. Trade data surprised to the downside in August with both exports and imports coming in weaker than […]

<p>PBOC has recently made some changes in its interest rate policy. Following the move to link the loan prime rate (LPR) to open market operations, the medium lending facility (MLF) rate, the central bank over the weekend announced the plan to set a floor for mortgage rate. The first change essentially lowers banks’ lending rates [&hell

<p>China’s economic data surprised to the downside in July. Delay in US tariff should have limited boost on China’s growth outlook. Industrial production gained +4.8% y/y in July, missing consensus of +5.8% and June’s 6.3%. The slowdown is the most severe since February 2009 and caught the market in surprise. Manufacturing PMIs compiled by go

<p>Coronavirus originated from Wuhan, China has become an pandemic affecting about 90 countries and territories in the world. In the Eurozone, the top 3 economies have reported totally 11,800 cases so far, with Italy alone taking up over 9,000 cases. The rapid transmission of the virus is expected hurt the region’s economy hard. We expe

<p>The Fed implemented an emergency rate cut of -50 bps on Tuesday, just two weeks ahead of the FOMC meeting scheduled on March 18. The Fed funds rate range now stands at 1-1.5%. While the move is not entirely surprising, given Chair Jerome Powell’s statement last Friday and Goldman Sachs’ report that followed, it reveals […]

<p>RBA becomes the first central bank to cut interest rate in light of the negative impacts from the coronavirus outbreak. The central bank lowered the cash rate by -25 bps to 0.50% in March, expected to ease further in the near future. As revealed in the accompanying statement, the members worried that the pandemic could […]

<p>The market has priced in a 60% chance of a BOC rate cut this week, up from virtually 0% two weeks ago. While moderation in domestic growth has suggested that further easing is likely, the coronavirus outbreak and its impact have the potential to push forward the rate cut schedule. Further easing is likely given […]