China: RRR cut in sight as inflation fears ease

• Factory-gate price inflation may have peaked
• Falling hog prices, stable housing rents and utilities costs will keep CPI inflation at bay
• State Council hinted at RRR cut to help bolster the economy as inflation
concerns dissipate
• Implications for investors: Yuan weakens as the proposed cut contrasts
with Fed talk of taper. CGB yields to fall amid more financial support for the
economy