MNI China Daily Summary: Tuesday, Aug 20

RIKSBANK CUTS POLICY RATE BY 25BP TO 3.5%

China Repo Rates Rise On Tuesday

MNI: PBOC Net Drains CNY236.6 Bln via OMO Tuesday

MNI: PBOC Sets Yuan Parity Lower At 7.1325 Tues; +2.12% Y/Y

MNI: EUROZONE JUN CONSTRUCTION OUTPUT +1.7% M/M, +1% Y/Y

Final Data Broadly Confirms Flash HICP Details

MNI: EUROZONE JUL FINAL HICP +0% M/M, +2.6% Y/Y

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

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EMERGING MARKETS: Harris Plans to Increase Corp Tax Rate, ECB's Rehn on Growth

EMERGING MARKETS
BulletEM BulletEmerging Market News
  • US: Kamala Harris is aiming to increase the US corporate tax rate to 28 per cent if she wins the White House in November, a move designed to raise government revenues from corporate America that is likely to draw criticism from business. Harris’s presidential campaign said on Monday that she planned to stick by a proposal put forward by President Joe Biden in recent years to bring the corporate tax rate up from 21 per cent to 28 per cent.
  • EU: Increasing risks to Europe’s growth outlook have reinforced the case for a policy adjustment when the European Central Bank meets next month, according to Governing Council member Olli Rehn. “In my view, the recent increase in negative growth risks in the euro area has reinforced the case for a rate cut at the next ECB monetary policy meeting in September - provided that disinflation is indeed on track,” the Finnish central bank chief said Monday at an event in New York.
  • China: MNI (Beijing) China's Loan Prime Rate remained unchanged on Tuesday according to a People's Bank of China statement, in line with market's expectation, and as the central bank continued to hold the key 7-day reverse repo rate stable. The Loan Prime Rate remained at 3.35% for the one-year maturity and 3.85% for the over five-year tenor. Both rates unexpectedly fell last month by 10 basis points after the central bank lowered the 7-day reverse repo rate by the same level.
  • Sweden: The Riksbank cut its key policy rate by 25 basis points to 3.5% as widely expected and stated that if inflation unfolded as expected it can cut two or three times more this year. In June, the Riksbank Executive Board had stated that “If the inflation outlook holds, the interest rate may be lowered two or three times in the second half of the year,” so Tuesday’s announcement adds one more.
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  • US: Kamala Harris is aiming to increase the US corporate tax rate to 28 per cent if she wins the White House in November, a move designed to raise government revenues from corporate America that is likely to draw criticism from business. Harris’s presidential campaign said on Monday that she planned to stick by a proposal put forward by President Joe Biden in recent years to bring the corporate tax rate up from 21 per cent to 28 per cent.
  • EU: Increasing risks to Europe’s growth outlook have reinforced the case for a policy adjustment when the European Central Bank meets next month, according to Governing Council member Olli Rehn. “In my view, the recent increase in negative growth risks in the euro area has reinforced the case for a rate cut at the next ECB monetary policy meeting in September - provided that disinflation is indeed on track,” the Finnish central bank chief said Monday at an event in New York.
  • China: MNI (Beijing) China's Loan Prime Rate remained unchanged on Tuesday according to a People's Bank of China statement, in line with market's expectation, and as the central bank continued to hold the key 7-day reverse repo rate stable. The Loan Prime Rate remained at 3.35% for the one-year maturity and 3.85% for the over five-year tenor. Both rates unexpectedly fell last month by 10 basis points after the central bank lowered the 7-day reverse repo rate by the same level.
  • Sweden: The Riksbank cut its key policy rate by 25 basis points to 3.5% as widely expected and stated that if inflation unfolded as expected it can cut two or three times more this year. In June, the Riksbank Executive Board had stated that “If the inflation outlook holds, the interest rate may be lowered two or three times in the second half of the year,” so Tuesday’s announcement adds one more.