China Policy Watch-More in store, much at stake
Oct 25 (Reuters) -Markets have swung from euphoria to jaded pessimism on China. While furtherstimulus is almost a certainty as the stakes for the economy continue to rise, whether or not the measuresmeet lofty expectation is the question.
China has announced a swathe of monetary policy easing steps since late September.The one-year medium-term lending facility rate was held at 2.00% on Friday, after anunprecedented 30-basis-point cut last month.
Traders are ontenterhooks awaiting the fiscal leg of the economic revival package, with no newsyet onthe anticipated meeting of the National People's Congress Standing Committee - China's top legislative body, typically held in late October.
On other fronts, China has unleashed restraints on property markets and liberatedanimal spirits in equity markets. The Shanghai Composite Indexhas risen around 20% since the stimulus press conference on Sept 24, though well off its reactionary surgeof 34%.
Next week, China's October PMIs will provide a glimpseof the early effects of all these measures. Expectations are low as global demand slowsand efforts to stoke domestic demand will take longer to materialize in the data.
Much is at stake as China's economy faces multiple headwinds, from demographic change to societal disenchantment, and of course, potentially seismic U.S. political event risks, makingthe attempt to pivot to consumption-driven growth even more imperative. That suggests China won't want the yuan to be too weak, even if it may support the backbone of the economy - exports.
For more click on FXBUZ
CNYfix: https://tmsnrt.rs/4eZoLGU
RMBindex: https://tmsnrt.rs/4hmShYD
CNYfibo: https://tmsnrt.rs/4hhmpol
China c.bank cuts benchmark loan prime rates https://reut.rs/4f8l41e
Ewen Chew is a Reuters market analyst. The views expressed are his own. Editing by Sonali Desai
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
