Goldman: PBoC To Be Data-Dependent, Fiscal & Credit Easing To Take Baton

In light of yesterday’s easing from the PBoC Goldman Sachs note that the Bank will likely “be data-dependent. On the one hand, sentiment in the property sector remains fragile as transaction growth stays weak and land sales continue to decline; on the other hand, as the PBoC flagged in its Q2 monetary policy report, higher inflation and DM monetary policy tightening spillover effects are still concerns. We expect headline CPI inflation to rise to more than 3% Y/Y in the next few months. We maintain our view that fiscal (especially infrastructure) and credit easing may play a more important role in coming months, but their impact could be weakened during the zero-Covid regime and property downturns.”