MNI China Daily Summary: Wednesday, July 3

MNI BRIEF:BOJ Q1 Output Gap Hits 16th Negative Reading In Row

MNI: PBOC Sets Yuan Parity Higher At 7.1312 Weds; -0.34% Y/Y

MNI: PBOC Net Drains CNY248 Bln Via OMO Weds; Rates Unchanged

CHINA PBOC CONDUCTS CNY2 BILLION VIA 7-DAY REVERSE REPOS WEDS

CHINA SETS YUAN CENTRAL PARITY AT 7.1312 WEDS VS 7.1291

MNI: US MBA: MARKET COMPOSITE -2.6% SA THRU JUN 28 WK

US MBA: REFIS -2% SA; PURCH INDEX -3% SA THRU JUNE 28 WK

EZ/UK T-Bill Calendar: 1/3/6-Month UKTB Auction on Friday

RPT-MNI: Canada Sticks To Fiscal Anchors, Spends Chunk Of Windfall

MNI BRIEF: Poilievre Calls QE 'Scam' And Would Limit BOC Remit

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Analysts Expect 25bp Cut In June, Banxico’s Borja Flags Sticky Service Prices

MEXICO
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  • The latest Banamex economist survey showed that analysts expect Banxico to cut its policy rate by 25bp at the June MPC meeting, following the pause earlier this month. The policy rate is still expected to reach 10% by the end of this year, but the end-2025 estimate was raised slightly to 7.88%, from 7.75%. The 2024 year-end CPI inflation estimate was also raised by 4bp to 4.21%.
  • Separately, Deputy Governor Galia Borja said at an event yesterday that service prices remain one of the main risk factors for reducing inflation to the 3% target. Service prices have not yet shown a downward trajectory and have remained at around 5% y/y since March 2023, she said.
  • No macro data are due today, with attention turning to tomorrow’s raft of releases including March economic activity, final Q1 GDP and bi-monthly CPI inflation for the first half of May. Banxico will also release the minutes to its recent MPC meeting on Thursday.
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  • The latest Banamex economist survey showed that analysts expect Banxico to cut its policy rate by 25bp at the June MPC meeting, following the pause earlier this month. The policy rate is still expected to reach 10% by the end of this year, but the end-2025 estimate was raised slightly to 7.88%, from 7.75%. The 2024 year-end CPI inflation estimate was also raised by 4bp to 4.21%.
  • Separately, Deputy Governor Galia Borja said at an event yesterday that service prices remain one of the main risk factors for reducing inflation to the 3% target. Service prices have not yet shown a downward trajectory and have remained at around 5% y/y since March 2023, she said.
  • No macro data are due today, with attention turning to tomorrow’s raft of releases including March economic activity, final Q1 GDP and bi-monthly CPI inflation for the first half of May. Banxico will also release the minutes to its recent MPC meeting on Thursday.