11 May 2015
PBoC to ease further, support a H2 Chinese recovery – Danske
FXStreet (Barcelona) - Senior Analyst at Danske Bank, Flemming Jegbjærg Nielsen, expects the PBoC to cut its benchmark rates further by 25bps and lower RRR by 150bp, which might support a moderate recovery for the Chinese economy into H2, 2015.
Key Quotes
“We expect PBoC to continue to ease in the coming months, albeit the easing measures are expected to be increasingly centred on cuts in the reserve requirement. The leading interest rates could be cut by another 25bp and the reserve requirement is expected to be cut by at least 150bp.”
“It is still our view that China is not targeting a weaker CNY to support growth. In the past two months the CNY has appreciated slightly against the USD and has decoupled from the weak data and the more aggressive monetary easing.”
“We expect the current easing measures to support a moderate recovery in H2 15 but it is still too early to call the bottom for the manufacturing PMIs.”
Key Quotes
“We expect PBoC to continue to ease in the coming months, albeit the easing measures are expected to be increasingly centred on cuts in the reserve requirement. The leading interest rates could be cut by another 25bp and the reserve requirement is expected to be cut by at least 150bp.”
“It is still our view that China is not targeting a weaker CNY to support growth. In the past two months the CNY has appreciated slightly against the USD and has decoupled from the weak data and the more aggressive monetary easing.”
“We expect the current easing measures to support a moderate recovery in H2 15 but it is still too early to call the bottom for the manufacturing PMIs.”