13 May 2015
China sees another weak set of data, further PBoC easing expected – BBH
FXStreet (Barcelona) - The Brown Brothers Harriman Team reviews today’s Chinese data release, noting that the weaker than expected Retail sales and investment data is in line with market expectations for further easing by the PBoC.
Key Quotes
“China reported another round of weaker than expected April data. Retail sales rose 10% y/y vs. 10.4% consensus, while IP rose 5.9% y/y vs. 6.0% consensus. The trade data was disappointing, and had pointed to downside risks to this data.”
“Fixed asset investment rose only 12% y/y vs. 13.5% consensus. New yuan loans came in lower than expected at CNY708 bln in April, which was also reflected in the weak aggregate financing number of CNY1.05 trln.”
“Even after the weekend cut, markets are pricing in further PBOC easing, and we agree. The decision to allow local government bonds to be used for collateral in PBOC operations is also a form of easing credit conditions.”
“PBOC fixed USD/CNY at a cycle low last week and is keeping it near there this week, supporting our view that the authorities aren’t pushing a weak yuan policy.”
Key Quotes
“China reported another round of weaker than expected April data. Retail sales rose 10% y/y vs. 10.4% consensus, while IP rose 5.9% y/y vs. 6.0% consensus. The trade data was disappointing, and had pointed to downside risks to this data.”
“Fixed asset investment rose only 12% y/y vs. 13.5% consensus. New yuan loans came in lower than expected at CNY708 bln in April, which was also reflected in the weak aggregate financing number of CNY1.05 trln.”
“Even after the weekend cut, markets are pricing in further PBOC easing, and we agree. The decision to allow local government bonds to be used for collateral in PBOC operations is also a form of easing credit conditions.”
“PBOC fixed USD/CNY at a cycle low last week and is keeping it near there this week, supporting our view that the authorities aren’t pushing a weak yuan policy.”