Global Economics Update From inflation crisis to financial crisis? Problems at California-based lender Silicon Valley Bank (SVB) have refocussed attention on financial sector risks. In light of this, we are resending a report from last October that provides a... 11th October 2022 · 5 mins read
Asset Allocation Update What would a policy shift do for China’s markets? The outlook for China’s economy has deteriorated recently, but it still doesn’t look like the PBOC will ease policy much in response. We suspect that if the central bank were to have a change of heart... 16th September 2022 · 5 mins read
Global Markets Update What rate cuts may mean for China’s financial assets We expect the PBOC to follow its recent policy rate cuts with further easing over the months ahead. This informs our decision to lower our forecasts for China’s 10-year government bond yield. But we... 24th August 2022 · 3 mins read
China Economics Update PBOC extends lifeline to struggling economy Today’s reductions to both the one-year and five-year Loan Prime Rates (LPR) continue the PBOC’s efforts to support the faltering economy. We expect additional easing to follow in the coming months... 22nd August 2022 · 3 mins read
China Economics Update Struggling for momentum China’s post-Omicron rebound has fizzled out and the prospects for near-term growth are poor. Virus outbreaks are happening with increasing frequency. The housing market remains in a downward spiral... 18th August 2022 · 6 mins read
China Economics Update Surprise rate cut amid economic woes The People’s Bank (PBOC) has cut its policy rates in response to a loss of economic momentum. A cut to the Loan Prime Rate (LPR) later this month is now a given and we expect additional easing... 15th August 2022 · 2 mins read
China Economics Update China doesn’t appear to want an economic fight The trade sanctions introduced by China on Taiwan in retaliation for the visit of Nancy Pelosi are small in scope rather than serious efforts to force Taipei to shift course. China is constrained in... 3rd August 2022 · 3 mins read
China Economics Update Policymakers give up on 5.5% growth The readout of the Politburo’s quarterly meeting on economic affairs has just been published by state media. It reiterates the need for more policy support but stops short of any major new... 28th July 2022 · 3 mins read
China Economics Update Bond rollout intended to prevent infrastructure slump Policymakers are reportedly bringing forward some planned government bond issuance from next year to support infrastructure investment in the second half of 2022. This will help avert the slump in... 8th July 2022 · 4 mins read
China Economics Update The limitations of China’s “new infrastructure” push Spending on high-tech “new infrastructure” should result in higher returns than adding more highways and railway lines. But it is not as effective a channel for cyclical policy stimulus. And a state... 7th July 2022 · 4 mins read
China Economics Update What impact would removal of Trump tariffs have? Cancelling all of the Trump tariffs on China would give a smaller direct boost to China’s export sector than many might think. More important would be the signal a unilateral rollback would give that... 9th June 2022 · 4 mins read
China Economics Update Why won’t the government help households? The view that policy support is best directed towards investment rather than consumption is deeply rooted in China. A few token consumer voucher schemes aside, this doesn’t seem to be changing. 8th June 2022 · 5 mins read
China Economics Update We think the renminbi will fall further While it has rebounded over the past couple of weeks, we expect the renminbi to resume its fall against the US dollar as China’s economy underwhelms, interest rate differentials continue to shift... 1st June 2022 · 4 mins read
China Economics Update Policy easing stepping up The State Council has announced support measures totalling 1.7% of GDP. Most of this comprises incentives for banks to lend to struggling firms, rather than fiscal stimulus. The People’s Bank has also... 24th May 2022 · 4 mins read
China Economics Update A helping hand for the housing market Today’s reduction to the five-year Loan Prime Rate (LPR) should help drive a revival in housing sales, which have gone from bad to worse recently. But the lack of any reduction to the one-year LPR... 20th May 2022 · 3 mins read
China Economics Update No good options Officials are struggling to balance a raft of conflicting goals spanning everything from GDP growth, zero-COVID, exchange rate stability, deleveraging and regulation. We don’t expect much compromise... 12th May 2022 · 6 mins read
