It’s becoming harder and harder to avoid the cold hard facts. China is slowing. The PBOC unexpectedly cut interest rates last week. The central bank began by cutting the benchmark lending rate on overnight, 7-day and 1-month standing lending facility (SLF). The move was followed by another surprising 0.20% cut in its 1-year policy rate, which is more than its usual move of 0.10% cuts.
The Citi China Economic Surprise Index, which measures whether economic statistics are beating or missing expectations, peaked in Q1 and it has been falling ever since. The market had hoped for some signs of new direction or signals of stimulus from the Third Plenum, but the communiqué was uninspiring.
As China’s economy slows, there are signs that it’s starting to take a toll on global risk appetite.
The full post can be found here.
No comments:
Post a Comment