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☆ Dollar stalls as dovish Fed tone dials down rate expectations
▼ + stars: | 2023-10-10 | by ( Tom Westbrook | ) www.reuters.com time to read: +4 min

REUTERS/Dado Ruvic/Illustration/File Photo Acquire Licensing RightsSINGAPORE, Oct 10 (Reuters) - The dollar remained steady against major peers on Tuesday, after a pause in its rally following a slight dovish shift in Federal Reserve officials' tone. "If long-term interest rates remain elevated because of higher term premiums, there may be less need to raise the Fed funds rate," said Dallas Fed president Lorie Logan -- a notable shift from previously hawkish rhetoric. Fed Vice Chair Philip Jefferson said the central bank would need to "proceed carefully" given the recent rise in yields. "There are another 13 Fed speakers scheduled this week which could see this theme develop further," said analysts at Westpac. "The idea that the increases in bond yields have done part of the tightening job appears to be gaining traction among some Fed officials," said OCBC rates strategist Frances Cheung.

Persons: Dado Ruvic, Lorie Logan, Philip Jefferson, Frances Cheung, Ken Cheung, Tom Westbrook, Sam Holmes, Simon Cameron, Moore Organizations: REUTERS, Rights, Federal, New, East, Swiss, Palestinian, Dallas, Fed, Westpac, Columbus, People's Bank of, Thomson Locations: Rights SINGAPORE, Asia, New Zealand, Israeli, Israel, Tokyo, People's Bank of China

☆ China's central bank set to boost liquidity but keep policy rate steady
▼ + stars: | 2023-09-14 | by ( ) www.reuters.com time to read: +2 min

SHANGHAI, Sept 14 (Reuters) - China's central bank is expected to boost liquidity while keeping the borrowing cost steady when rolling over its medium-term policy loans on Friday, a Reuters survey showed, after a string of data showed some signs of economic stabilisation. China has already lowered the medium-term policy rate twice since June to stimulate credit demand and support a faltering economic recovery. New bank lending in China beat expectations by nearly quadrupling in August from July's level, as the central bank sought to shore up economic growth amid soft demand at home and abroad. To revive broad credit demand and rescue the troubled property sector, China unexpectedly cut the MLF rate last month. For this reason alone, it seems unlikely that the PBOC will embrace large-scale rate cuts."

Persons: Frances Cheung, Julian Evans, Pritchard, Shri Navaratnam Organizations: People's Bank of China, OCBC Bank, U.S, Capital Economics, Shanghai, Thomson Locations: SHANGHAI, China, United States, OCBC Bank .

☆ Reaction to China inflation data
▼ + stars: | 2023-08-09 | by ( ) www.reuters.com time to read: +5 min

Below are comments from analysts on the inflation data:XING ZHAOPENG, SENIOR CHINA STRATEGIST, ANZ, SHANGHAI"Both CPI and PPI in year-on-year terms fell into negative territory and confirmed economic deflation. "With destocking and credit expansion, we expect PPI and CPI will rebound from the bottom in the fourth quarter. The CPI deflation may put more pressure on the government to consider additional fiscal stimulus to mitigate the challenge." XIA CHUN, CHIEF ECONOMIST, YINTECH INVESTMENT HOLDINGS, HONG KONG"The lower inflation data reflects weak demand on the mainland, which is biggest challenge facing China's economy. It also shows China's slower-than-expected economic rebound is not strong enough to offer the weaker global demand and lift commodity prices."

Persons: XING ZHAOPENG, CHUAN, FRANCES CHEUNG, Rather, ZHIWEI ZHANG, MARCO SUN, XIA CHUN, GARY NG, Liangping Gao, Ellen Zhang, Winni Zhou, Samuel Shen, Li Gu, Sam Holmes Organizations: ANZ, CPI, PPI, OCBC, SHANGHAI, MUFG BANK, ASIA PACIFIC, Thomson Locations: BEIJING, CHINA, SHANGHAI, China, SINGAPORE, HONG KONG, Japan, Beijing, Shanghai, Hong Kong

☆ China swings into deflation as recovery falters
▼ + stars: | 2023-08-09 | by ( Reuters Staff | ) www.reuters.com time to read: +4 min

BEIJING (Reuters) -China’s consumer prices fell into deflation in July, while factory gate prices extended their declines, as the world’s second-largest economy struggled to revive demand and pressure mounted for authorities to release more direct stimulus. FILE PHOTO: Staff sort fruits at a Walmart in Beijing, China, September 23, 2019. China’s economic recovery slowed after a brisk start in the first quarter, as demand at home and abroad weakened. “Both CPI and PPI in year-on-year terms fell into negative territory and confirmed economic deflation,” said Xing Zhaopeng, senior China strategist at ANZ. Otherwise, economic data showing some growth improvement is required, which is not coming through yet.”JAPAN-STYLE DEFLATION?

Persons: Tingshu Wang, “, ”, Xing Zhaopeng, Xing, Frances Cheung, Japan’s “, Liu Guoqiang Organizations: Walmart, REUTERS, National Bureau of Statistics, Authorities, CPI, PPI, ANZ, “, OCBC Bank, NBS, Investors Locations: BEIJING, Beijing, China, Shanghai, Singapore, JAPAN, Brazil

"The central bank's rate cut decision was not a complete surprise to the market," said Ken Cheung, chief Asian FX strategist at Mizuho Bank. Further interest rate cuts in China would only widen the yield gap with the United States, even if the Fed pauses this week, sending the yuan lower and accelerating capital outflows. Tuesday's rate cut suggests policymakers are increasingly worried about the health of China's recovery, traders and analysts said. Bloomberg reported on Tuesday, citing unnamed sources, that China was considering at least a dozen stimulus measures including cuts to interest rates to support areas such as real estate and domestic demand. "There could be another RRR or policy interest rate cut in Q4, depending on the economic outcome over the next several months."

Persons: Ken Cheung, Yi Gang, Cheung, Marco Sun, Frances Cheung, Goldman Sachs, Winni Zhou, Tom Westbrook, Sam Holmes, Jacqueline Wong Organizations: People's Bank of China, Mizuho Bank, MUFG Bank, Bloomberg, OCBC Bank, Thomson Locations: SHANGHAI, SINGAPORE, China, United States, outflows

☆ China cuts short-term borrowing costs as economy slows
▼ + stars: | 2023-06-13 | by ( ) www.reuters.com time to read: +4 min

SummarySummary Companies PBOC lowers 7-day reverse repo to 1.9% vs. 2.0% prev. The People's Bank of China (PBOC) cut its seven-day reverse repo rate by 10 basis points to 1.90% from 2.00% on Tuesday, when it injected 2 billion yuan ($279.97 million) through the short-term bond instrument. "The central bank's rate cut decision was not a complete surprise to the market," said Ken Cheung, chief Asian FX strategist at Mizuho Bank. Tuesday's rate cut suggests policymakers are increasingly worried about the health of China's recovery, traders and analysts said. "However, the market is expecting the PBOC to cut the policy rate further.

Persons: 10bp, Ken Cheung, Yi Gang, Cheung, Marco Sun, Frances Cheung, Julian Evans, Pritchard, Winni Zhou, Tom Westbrook, Kim Coghill, Sam Holmes Organizations: People's Bank of China, Mizuho Bank, MUFG Bank, OCBC Bank, Capital Economics, Thomson Locations: SHANGHAI, SINGAPORE, China, United States, outflows

☆ China keeps lending benchmarks unchanged amid signs of recovery
▼ + stars: | 2023-04-20 | by ( ) www.reuters.com time to read: +2 min

SHANGHAI/SINGAPORE, April 20 (Reuters) - China kept its benchmark lending rates unchanged for the eighth straight month on Thursday in line with expectations, as the economic recovery reduced the need for any immediate monetary support. The one-year loan prime rate (LPR) was kept at 3.65%, while the five-year LPR was unchanged at 4.30%. The medium-term lending facility (MLF) rate now serves as a guide to the LPR. Markets mostly use the medium-term policy rate as a indication of likely changes to the lending benchmarks. "There might be cuts to deposit rate and 5-year LPR, so as to lower funding costs and support long-term business loans."

☆ Instant View: China's economy slows sharply in Q4, 2022 growth one of the worst on record
▼ + stars: | 2023-01-17 | by ( ) www.reuters.com time to read: +10 min

As a result, the Chinese economic growth rate will be below the Chinese government's target of 5% plus." This could weigh on their potential economic growth in the mid-and long-term, and we really need to be paying attention to that." MARCO SUN, CHIEF FINANCIAL MARKET ANALYST, MUFG BANK (CHINA), SHANGHAI"China's Q4 and full-year 2022 GDP growth rates came in higher than expected. Economic growth will have to depend more on productivity growth, which is driven by government policies." IRIS PANG, GREATER CHINA ECONOMIST, ING, HONG KONG"The biggest surprise is the retail sales number, which is really a big beat...

☆ China central bank to maintain or increase policy-loan liquidity - Reuters poll
▼ + stars: | 2023-01-13 | by ( ) www.reuters.com time to read: +3 min

The PBOC manages liquidity by extending loans to banks under its one-year medium-term lending facility (MLF). Twelve analysts expected the central bank to replace that debt exactly with 700 billion yuan of new lending, and 10 expected it to go further and lend a greater amount. A great majority - 21 traders and analysts - expected the MLF interest rate to stay unchanged at 2.75% this month, while the remaining four respondents expected a small rate cut. Markets still expect some monetary policy easing measures to support economic recovery, including cuts to policy rates and the amount of cash that banks must set aside as reserves. "The PBOC will likely cut interest rates soon to aid the expected economic recovery this year."

☆ China's key money rate hits near 2-year low, but softening seen fleeting
▼ + stars: | 2022-11-22 | by ( ) www.reuters.com time to read: +3 min

SHANGHAI, Nov 22 (Reuters) - Liquidity conditions in China's interbank money markets eased further on Tuesday, as cash supply far outpaced demand, despite a huge withdrawal of funds by the central bank. Traders said declines in interbank rates were largely due to looser cash conditions after financial institutions cut leverage this month. While most other major economies are raising interest rates to tame inflation, Beijing is focusing more on propping up a slowing economy by keeping money rates low. And many market participants had taken advantage of the low repo rates to fund leveraged trades in bonds, traders said. However, markets are divided whether the falls in the money rates would be sustainable.

☆ China leaves lending benchmarks unchanged amid global rates squeeze
▼ + stars: | 2022-09-20 | by ( Reuters Staff | ) www.reuters.com time to read: +3 min

FILE PHOTO: People wearing face masks walk past the headquarters of Chinese central bank People's Bank of China (PBOC), April 4, 2020. The one-year loan prime rate (LPR) was kept at 3.65%, while the five-year LPR was unchanged at 4.30%. The steady LPR fixings came after the People’s Bank of China (PBOC) last week left its medium-term policy rate unchanged, while draining some liquidity from the banking system. China lending ratesThe borrowing cost of the medium-term lending facility (MLF) serves as a guide to the LPR, and markets usually use the medium-term rate as a precursor to any changes to the lending benchmarks. Marco Sun, chief financial market analyst at MUFG Bank (China), said economic indicators surprised on the upside in August.

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