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DBS: China Market

Posted on August 16, 2022August 16, 2022 By alanyeo No Comments on DBS: China Market

China: Not a rate cut cycle yet

The PBoC cut the 1Y MLF rate by 10bps to 2.75% this morning.

The latest batch of macro data in July is discouraging.

Retail sales growth decelerated from 3.1% YoY in June to 2.7% in July.

Export-led industrial production edged down from 3.9% to 3.8%.

Fixed asset investment fell visibly from 6.1% YoY YTD to 5.7%.

Implication to our investors: 

(i) We expect another 20bps of 1Y-LPR and MLF cut in this year only. The PBoC could also cut the RRR by 50bps. 

(ii) 2Y and 10Y CGB yields will hover around 2.2% and 2.7% in 2022 respectively. 

220815_insights_chinaClick here to Download Full Report in PDF

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Research - Equities Tags:China Economics, china economy, China Macro, China Market, China Strategy

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