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☆ Analysis: China c.bank to offer limited, targeted growth support, no bazooka
▼ + stars: | 2022-12-01 | by ( Kevin Yao | ) www.reuters.com time to read: +5 min

Since 2020, when the world's second-largest economy was first jolted by the coronavirus, the PBOC has expanded its arsenal of structural policy tools, including relending and rediscount facilities and other low-cost loans. "The central bank is likely to expand the scope of structural policy tools and step up the use of such tools," said a person involved in policy discussions who spoke on condition of anonymity. Its outstanding loans made via structural tools amounted to nearly 5.6 trillion yuan ($781.64 billion) at the end of September, central bank data showed. A central bank adviser said last month that China should set a growth target no lower than 5% for next year. On Nov. 21, the central bank kept its benchmark lending rates unchanged for a third straight month.

As the coronavirus has spread in China, Beijing has imposed prolonged lockdowns in several places. The stringent COVID-19 measures also stoked rare street protests across many cities over the weekend. Reuters GraphicsThe sub-indexes for manufacturing PMI including output, employment and suppliers' delivery times all shrank in November at a faster pace than the month before, the data showed. The official manufacturing PMI largely focuses on big and state-owned firms. The private sector Caixin manufacturing PMI, which centres more on small firms and coastal regions, will be published on Thursday.

☆ Canada house prices to tumble 17.5% peak to trough, say analysts
▼ + stars: | 2022-11-24 | by ( Indradip Ghosh | Gabriel Araujo | ) www.reuters.com time to read: +4 min

House prices need to fall 25% from peak to trough in order to make them affordable, according to the median response to an additional question. Reuters Poll - Canada housing market outlookThat was in line with BoC Senior Deputy Governor Carolyn Rogers who said this week house prices needed to fall to restore balance to the housing market. A majority of property market experts said the risk of a crash in house prices was low. During the financial crisis, U.S. house prices crashed as much as around 40% but the Canadian market fell only 9% then. "In more 'normal' times before the pandemic, a 30% drop in house prices would be considered a crash.

☆ China keeps key lending rate unchanged as policymakers balance yuan, economic risks
▼ + stars: | 2022-11-15 | by ( ) www.reuters.com time to read: +3 min

"Keeping policy rates stable will help curb widening interest rate differentials between China and the United States and stabilise FX market expectations." With 1 trillion yuan worth of MLF loans set to expire on the same day, the operation resulted in a net 150 billion yuan medium-term cash withdrawal through the instrument. The central bank said the latest operation was aimed at counteracting higher cash demand due to tax payments and keeping "banking system liquidity reasonably ample". Separately, the central bank also injected 172 billion yuan through seven-day reverse repos while keeping borrowing costs unchanged at 2.00%, compared with 2 billion yuan worth of such loans expiring on the same day. The central bank will "continue to maintain ample liquidity, but chances for an interest rate cut are low," he said.

☆ Lower-income Canadians to be hit harder by economic slowdown- BoC's Macklem
▼ + stars: | 2022-11-14 | by ( ) www.reuters.com time to read: 1 min

OTTAWA, Nov 14 (Reuters) - Lower-income Canadians will be disproportionately affected by the slowdown in economic activity that is needed to rebalance supply and demand to ease inflationary pressures, Bank of Canada Governor Tiff Macklem said on Monday. "Slowing economic growth will disproportionately affect our most vulnerable households," he said in opening remarks at the Conference on Diversity, Equity and Inclusion in Economics, Finance and Central Banking. "But once we rebalance demand and supply, growth will pick up, our economy will grow solidly, and the benefits of low and predictable inflation will be restored," he added. Reporting by Steve Scherer and Julie Gordon in OttawaOur Standards: The Thomson Reuters Trust Principles.

☆ China's factory gate prices suffer first drop since Dec 2020 as COVID curbs take toll
▼ + stars: | 2022-11-09 | by ( Anant Chandak | Tetsushi Kajimoto | ) www.reuters.com time to read: +4 min

The consumer inflation also moderated from a 29-month high in September, and underlying price pressures remained much more modest with core inflation rising 0.6% in October, unchanged from September. "However, the worsening of global growth is denting external demand." Reuters Graphics Reuters GraphicsPOLICY CHALLENGEThe consumer price index climbed 2.1% from a year earlier, easing from a 29-month high of a 2.8% increase in September, mainly driven by falling food prices. Food prices rose 7.0% in annual terms, slowing from 8.8% rise in the previous month, with fresh vegetable prices off 8.1% from a 12.1% rise in September. However, Pork prices - a key driver of the CPI - rose 51.8% year-on-year in October, faster than 36% growth in September.

☆ China's factory gate prices drop for first time since Dec 2020 as COVID curbs take toll
▼ + stars: | 2022-11-09 | by ( Anant Chandak | Tetsushi Kajimoto | ) www.reuters.com time to read: +4 min

☆ Bank of Canada focus on more timely inflation data lowers overshoot risk
▼ + stars: | 2022-11-07 | by ( Fergal Smith | ) www.reuters.com time to read: +3 min

Inflation tends to be reported on a year-over-year basis to smooth out fluctuations that occur in shorter-term measures. Some forecasters expect Canada's economy to dip into recession next year along with a downturn in global activity. Twelve-month rates include price growth that occurred much earlier in the year, economists explain. Inflation is likely to be more persistent after it spread from goods prices into slower-moving items, such as wages and services. Still, the BoC has opened the door to slowing the pace of tightening to more normal steps of 25 basis points.

Instead, "the onus is still squarely, fully, 100% on the Bank of Canada to tighten," he said. The BoC's policy rate is seen peaking at 4.5% in early 2023. "I think they're going to struggle to see any improvement in the coming fiscal year," said Doug Porter, chief economist at BMO Capital Markets, adding that the fiscal measures were working at a slight crosscurrent to monetary policy. The fact that Prime Minister Justin Trudeau's government depends on the left-leaning New Democrats to pass legislation like the fiscal update helps explain the new spending, said Jimmy Jean, chief economist at Desjardins. ($1 = 1.3499 Canadian dollars)Reporting by Steve Scherer; Editing by Paul SimaoOur Standards: The Thomson Reuters Trust Principles.

☆ 'Best smidcap stock that investors don't know about' is in billboards and broadband, Wells Fargo says
▼ + stars: | 2022-11-01 | by ( Sarah Min | ) www.cnbc.com time to read: +2 min

Boston Omaha, an outdoor advertising and broadband telecom services company, is "the best smidcap stock that investors don't know about," according to Wells Fargo. Wells Fargo analyst Steven Cahall raised the price target to $34 (from $27), implying shares of Boston Omaha can surge roughly 22% on the back of strong internal and external growth. "We're raising 2022/23 EBITDA at Billboards and Broadband, as organic growth remains solid. Boston Omaha shares have outpaced the S & P 500 this year, down nearly 3% compared to the roughly 19% decline in the broader market index. "We think BOC likes to find mid-stage growth businesses that have long-term ROICs and would benefit from expansion capital," Cahall wrote.

☆ BoC's Macklem: No threat to independence of Canada's central bank - report
▼ + stars: | 2022-10-30 | by ( ) www.reuters.com time to read: +2 min

read more"I do not have any concerns about the bank's independence being under threat," Macklem was quoted saying in an interview with The Canadian Press. The remarks were published online on Sunday but the interview was conducted on Wednesday, The Canadian Press said. Canada, with its pricey homes and top of the G7 household debt levels, is particularly sensitive to higher interest rates, with fears mounting the BoC's aggressive hikes will trigger a recession. In his interview with The Canadian Press, Macklem acknowledged: "Lots of people are giving us advice on what we should do." And it's at times like this, that when it's difficult, that you see the value of the independence of central banks," he told The Canadian Press.

[1/5] Volunteers fill boxes with donated food at the Ottawa Food Bank warehouse in Ottawa, Ontario, Canada October 27, 2022. Demand has surged 33% at the Ottawa Food Bank from pre-COVID-19 pandemic levels, with visits up as spiraling grocery, gas and rent prices, along with fast-rising borrowing costs, leave more Canadians struggling to make ends meet. "That's because the cost of food has risen ... but also because of the number of people that are turning to a food bank right now," said Wilson. "Our wholesalers are definitely more tentative about spending money," said Farnell. "Everyone's nervous ... Will people be spending money?

[1/2] People buy food at stalls promoting China's digital yuan, or e-CNY, during the 2022 China International Fair for Trade in Services (CIFTIS) in Beijing, China September 1, 2022. REUTERS/Tingshu WangHONG KONG/SHANGHAI, Oct 27 (Reuters) - China's digital yuan took the centre stage in the world's largest cross-border central bank digital currency (CBDC) trial to date, a report showed, pointing to how Beijing is speeding up yuan globalization efforts amid rising geopolitical tensions. China's digital currency, or e-CNY, was the most issued, and actively transacted token in the $22 million pilot that used CBDCs to settle cross-border trades, a Bank of International Settlement (BIS) report showed. The PBOC's participation in m-Bridge represents its ambition to eventually promote global, wholesale use of the e-CNY. But China's yuan internationalisation, digital or not, faces challenges amid a slowing economy ravaged by COVID flare-ups, and a property debt crisis.

☆ BoC to dial down size of rate rises again but not done yet: Reuters poll
▼ + stars: | 2022-10-18 | by ( Indradip Ghosh | ) www.reuters.com time to read: +3 min

The expected move at the BoC's next meeting would be the second consecutive reduction in the size of rate rises after a 100 basis point move in July and 75 basis points last month. Given more U.S. Federal Reserve rate rises are due in coming months, the BoC is likely to get the overnight rate, currently at 3.25%, even further above its 2-3% estimate of neutral, where the economy is neither stimulated nor restricted. So far the BoC has matched the 300 basis points of Fed rate rises since March. "We continue to assume the BoC will dial back the pace of rate hikes with a 50 basis point increase later this month," said Josh Nye, senior economist at RBC. Most economists forecast another slowdown in the size of rate rises to 25 basis points in December and January, taking the overnight rate to a peak of 4.25%.

☆ 'Do not bet': China's central bank warns against yuan speculation
▼ + stars: | 2022-09-29 | by ( Evelyn Cheng | ) www.cnbc.com time to read: +1 min

The Chinese yuan weakened past the closely-watched 7.2 level against the greenback this week. BEIJING — The People's Bank of China has warned against betting on the yuan, after its rapid decline against the U.S. dollar this week. "Do not bet on a one-sided appreciation or deprecation of the renminbi exchange rate," the central bank said in a Chinese statement on its website late Wednesday, according to a CNBC translation. That's based on a readout of a speech by vice governor Liu Guoqiang at a video conference meeting on foreign exchange that day. The renminbi, or the yuan, crossed the 7.2 level against the greenback Wednesday, falling to its weakest since 2008.

☆ Exclusive: China's state banks told to stock up for yuan intervention
▼ + stars: | 2022-09-29 | by ( Julie Zhu | ) www.reuters.com time to read: +3 min

China's offshore yuan immediately bounced about 200 pips after Reuters' story before last trading at 7.1849 per dollar as of 0935 GMT. The offshore yuan moves in lock-step with the onshore unit, but its trading volumes account for about 70% of all yuan FX trades globally, dwarfing the volumes traded on the mainland. Chinese authorities have intervened in the past in the offshore yuan market to steer the yuan. Sources said the intervention plan involved using state lenders' dollar reserves primarily. Earlier this week, Chinese monetary authorities told local banks to revive a yuan fixing tool it abandoned two years ago as they sought to steer and defend the weakening currency.

☆ Analysis: Loonie bulls reel as Bank of Canada trails Fed on terminal rate bets
▼ + stars: | 2022-09-27 | by ( Fergal Smith | ) www.reuters.com time to read: +4 min

A Canadian dollar coin, commonly called a "loonie," and an American dollar bill are seen in this staged photo in Toronto, March 17, 2010. ,A lower terminal rate for the BoC than the Fed is not uncommon, but it threatens to pour cold water on Canadian dollar bulls' expectations that interest rate differentials would help underpin the currency over the coming year. The Canadian dollar has weakened 7.5% against the greenback since the start of the year. Canada's housing market has slowed rapidly in recent months, while its share of the economy, at 9%, is nearly twice that of the U.S. housing market. "Canada's economy is simply more interest rate sensitive than the U.S. economy," said Royce Mendes, managing director and head of macro strategy at Desjardins.

☆ China's yuan hits 28-month low despite fresh policy step, nears daily down-limit
▼ + stars: | 2022-09-26 | by ( ) www.reuters.com time to read: +3 min

It was changing hands at 7.1662 at midday, 364 pips weaker than the previous late session close. read moreBy midday, the global dollar index hovered around its two-decade high of 113.996 at midday, while the offshore yuan was trading at 7.1704 per dollar. The yuan market at 0401 GMT:ONSHORE SPOT:Key indexes:*Divergence of the dollar/yuan exchange rate. Negative number indicates that spot yuan is trading stronger than the midpoint. The People's Bank of China (PBOC) allows the exchange rate to rise or fall 2 percent from official midpoint rate it sets each morning.

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