Assets linked to Chinese overcapacity remain vulnerable

Aug 26, 2015 05:59 am UTC| Commentary

Chinese growth has been slowing since 2011, so asset prices that are linked to China have been pricing in slower growth prospects long before the recent changes to CNY. How far have these assets gone relative Chinas growth...

China's capital outflows likely to persist in H2

Aug 26, 2015 05:52 am UTC| Commentary

Ahead of the IMFs SDR review, the PBoC made a commitment to liberalising the pricing mechanism of the USD/CNY fixing rate to be more driven by the market. The CNY is overvalued vs the USD at the current level, hence...

China's growth risks remain to the downside

Aug 26, 2015 05:48 am UTC| Commentary

As the Chinese economy continues to face domestic headwinds from excess capacity in many industries, oversupply in the housing market, high debt/GDP (especially among the state sector and local governments), as well as...

One symmetric PBoC rate cut likely in Q3

Aug 26, 2015 05:45 am UTC| Commentary

Stabilising growth and channelling low cost financing to the real economy remain the top priority for Chinas monetary policy in H2 2015. Despite the four interest rate cuts since November 2014 and +150bp RRR cuts, in July,...

PBoC will not hesitate to ease further if needed

Aug 26, 2015 05:41 am UTC| Commentary

The PBoC cut the reserve requirement ratio for large banks (RRR) by 50bp (effective 6 Sept) as most in the market had been expecting for some time. In addition, the central bank also lowered benchmark deposit rates and...

More rate cuts likely from PBoC

Aug 26, 2015 05:41 am UTC| Commentary

Following a stock market sell-off and increasing fear of a looming financial crisis, the PBoC announced a symmetric 25bp benchmark rate cut on Tuesday, combined with a 50bp RRR cut. This is the second such combined cut,...

China's August data likely to be weaker than in July

Aug 26, 2015 05:37 am UTC| Commentary

The PBoC move comes after some rapid deterioration in the Q3 data and equity market turmoil.Following across-the-board weakness in Chinas July activity data, including decelerating industrial production and moderating...