28 Nov 2014
China surprised markets with the rate cut in Nov - BBH
FXStreet (Guatemala) - Analysts at Brown Brothers Harriman noted that the People’s Bank of China surprised the markets with rate cuts last Friday.
Key Quotes:
"The 1-year lending rate was cut 40 bp to 5.6%, while the 1-year deposit rate was cut 25 bp to 2.75%. It was also a big week in China for initial public offerings”.
“The CNY1.6 trillion worth of shares brought to market was reportedly the most of the year”.
“The anticipation has tied up liquidity and had lifted money market and repo rates in recent days”.
“We note that HK-Shanghai equity link did not produce the big bang that many anticipated. It suggests that the missing element, at least at the moment, is desire rather than access”.
Key Quotes:
"The 1-year lending rate was cut 40 bp to 5.6%, while the 1-year deposit rate was cut 25 bp to 2.75%. It was also a big week in China for initial public offerings”.
“The CNY1.6 trillion worth of shares brought to market was reportedly the most of the year”.
“The anticipation has tied up liquidity and had lifted money market and repo rates in recent days”.
“We note that HK-Shanghai equity link did not produce the big bang that many anticipated. It suggests that the missing element, at least at the moment, is desire rather than access”.