MNI China Daily Summary: Monday, July 22

MNI BRIEF: PBOC Lowers Ceiling of Its Interest Corridor

MNI: China CFETS Yuan Index Down 0.05% In Week of Jul 19

MNI: PBOC Sets Yuan Parity Higher At 7.1335 Mon; -1.18% Y/Y

MNI: PBOC Conducts CNY58.2 Bln Via OMO Mon; 7day Repo Rate Cut

MNI BRIEF: PBOC Cuts 7-Day Repo Rate By 10bp

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Pay concerns push back easing expectations; curve flattens

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

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Goldman Sachs Says Caution Needed Over Near-Term Policy

BRAZIL
  • Goldman Sachs believe the moderation of inflation, including core, support the continuation of a gradual easing cycle. However, the tight labor market backdrop, expansionary fiscal and quasi-fiscal policy, lack of credibility of the 2024-26 fiscal targets, still unanchored 2024 and-medium-term inflation expectations, a balance of risk for food inflation skewed to the upside, and tight services inflation fundamentals (labor market backdrop and fiscal transfers) demand caution in the near-term calibration of monetary policy.
  • The significantly higher Dec IPCA-15 was driven by a significantly higher than expected print in the (services) public transportation subcomponent. Core inflation printed at a moderate but slightly higher than expected 0.28% with the annual measure easing further to 4.45% yoy. Services inflation printed at a high 0.65%, under pressure from transportation, driving the annual rate up to 6.36% from 6.00% in Nov. Core services inflation printed at a more moderate but also higher than expected 0.28% and is now tracking at 4.73% yoy (vs 4.60% in Nov).
  • Inflation in Dec benefited from lower monthly readings in airfares, food at home, clothing and (durable) household goods.
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