MNI China Daily Summary: Monday, July 29

MNI: China CFETS Yuan Index Up 0.15% In Week of Jul 26

MNI: PBOC Net Injects CNY243.37 Bln via OMO Monday

MNI: PBOC Sets Yuan Parity Higher At 7.1316 Mon; -1.56% Y/Y

CHINA PBOC CONDUCTS CNY301.57 BILLION VIA 7-DAY REVERSE REPOS MON

CHINA SETS YUAN CENTRAL PARITY AT 7.1316 MON VS 7.1270

CBI Retail Sales Fell Faster Than Expected For The Second Month

MNI: UK CBI JUL DIST TRADE REPORTED SALES -43

MNI: UK BOE JUN MORTGAGE APPROVALS 59,976

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

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ING on Hungary Sovereign Rating

HUNGARY
  • The latest report by Fitch called Hungary one of the most vulnerable CEE countries due to its exposure to a gas cut-off.
  • On top of that, the Rule of Law debate and the possible loss of EU funds looms large over the next rating reviews, especially as the EU hasn’t clearly affirmed the positive voices telegraphed by Hungarian officials.
  • ING saw a turnaround in monetary and fiscal policy though, both being ultra-aggressive with tightening and breaking taboos (like changing the utility bill support scheme, raising tax on labour).
  • The armada of decisions will improve the internal and external balances and will help the fight against inflation in the medium term, though this does bring Hungary one step closer to a recession.
  • This mixed picture means the rating decisions might hinge on qualitative analyses and discretionary decisions.
  • In this respect, ING sees the highest chance for a downgrade in the rating outlook to negative by Fitch, while S&P’s latest positive reaction to the budgetary changes suggests there is a good chance of no change here.
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