Credit Data Disappoints After Latest PBoC Easing, Potential For Further Loosening Eyed

The well-documented PBoC cut to the 7-day reverse repo rate was followed up by heightened speculation surrounding the potential for wider policy easing (via BBG sources), in addition to cementing expectations for cuts to benchmark interest rates in the coming days.

• Recently released data revealed that China's credit metrics for the month of May topped levels seen in April, although the optics of the miss against wider expectations may be worsened by the presence of media reports which had pointed to a meaningful bounce back in the May dataset.
• The releases (coupled with policymakers potentially getting an early look at the impending round of monthly economic activity data releases) may also explain the cut to the 7-day day reverse repo rate/heightened speculation surrounding further easing measures.