BofAML: "After the notable increase in........>

CHINA: BofAML: "After the notable increase in US-China trade conflict risk in

March this year, we have shifted our policy call away from further Chinese

deleveraging. In our view, Chinese policy makers will unlikely choose to

intensify deleveraging efforts before the dust on trade negotiations settles. To

avoid a double-whammy from a potential trade shock and domestic overtightening,

we believe top decision makers will hold back additional deleveraging efforts

until there is more certainty on the trade front."

- "While one could argue the reserve requirement ratio (RRR) cut has a small

liquidity impact (partly to be offset by expiring Medium-term Lending Facility

(MLF)), we still think the move signals a tipping point in liquidity. First, it

replaces short-term liquidity provided by MLF with long-term liquidity through

the RRR cut. Second, the PBoC is often concerned about sending the wrong message

if they take the policy advice to cut RRR during deleveraging. The very fact

that the central bankers know it will be seen as easing and still went ahead to

do it implies there was an intentional signaling effect.