Familiar Focus Points In PBoC Financial Stability Meeting Readout

The initial newswire headlines and press release covering the PBoC’s ’24 financial stability meeting don’t provide much for markets to trade off.

• The Bank points to the need to develop the mechanisms related to resolving financial risks, along with improving its risk monitoring systems.
• It also stresses that it will deal with existing risks in an orderly manner.
• Well-documented areas of risk remain front and centre when it comes to the Chinese economy and policymakers have stepped up their vigilance and rhetoric in recent months.
• This is the latest instance of communique factoring into that push, as policymakers focus on facilitating/supporting the rebound of the Chinese economy.
• USD/CNH edged away from session lows to ~CNH7.2600, but the move is contained. The PBoC’s bias against runaway yuan weakness remains evident in the daily mid-point fixing, although export competitiveness will also be a factor for policymakers to assess if the broader USD strength holds/develops further.