25 Jun 2013
Flash: Chinese market rates likely to remain higher - Nomura
FXstreet.com (Barcelona) - The People's Bank of China (PBoC) issued a press release on its second quarter monetary policy committee (MPC) meeting on Sunday evening, saying that the committee had agreed to "fine-tune policy when necessary".
The statement, in view of Zhiwei Zhang, Economist at Nomura, "while less hawkish than the overall message from the Q1 MPC meeting, does not suggest that the policy stance has shifted from tightening to loosening." Besides, Zhang believes that the PBoC main policy objectives have not changed, saying that "policy tightening only started in mid-March, and a shift of policy to an easing bias would exacerbate these financial risks" Zhang adds.
Zhang recommends to keep an eye on the 7-day repo rate and 3-month Shibor rate to, as the Economist say, "judge the direction of policy." The center baseline view from Zhang "is that these market interest rates are likely to remain higher than their month-ago levels, at least until 15 July when the Q2 GDP data is released."
The statement, in view of Zhiwei Zhang, Economist at Nomura, "while less hawkish than the overall message from the Q1 MPC meeting, does not suggest that the policy stance has shifted from tightening to loosening." Besides, Zhang believes that the PBoC main policy objectives have not changed, saying that "policy tightening only started in mid-March, and a shift of policy to an easing bias would exacerbate these financial risks" Zhang adds.
Zhang recommends to keep an eye on the 7-day repo rate and 3-month Shibor rate to, as the Economist say, "judge the direction of policy." The center baseline view from Zhang "is that these market interest rates are likely to remain higher than their month-ago levels, at least until 15 July when the Q2 GDP data is released."