MNI China Daily Summary: Wednesday, April 17

MNI BRIEF: China To Quicken Project Construction - NDRC

MNI BRIEF:ECB Unifies Interest On Non-Monetary Policy Deposits

MNI: PBOC Conducts CNY2 Bln Via OMO Weds; Liquidity Unchanged

MNI: PBOC Sets Yuan Parity Lower At 7.1025 Weds; -5.39% Y/Y

CHINA PBOC INJECTS CNY2 BILLION VIA 7-DAY REVERSE REPOS WEDS

US EIA: CRUDE OIL STOCKS EX SPR +2.74M TO 460.0M APR 12 WK

MNI: FOREIGN HOLDINGS OF CANADA SECURITIES -8.8B CAD IN FEB

ECB Underlying Inflation Metrics Support June Cut Consensus

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

MNI BRIEF: Poilievre Calls QE 'Scam' And Would Limit BOC Remit

MNI: Growth Drag From Net Zero Carbon Goal Can Be Offset-OECD

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JPM on 5Y LPR Cut

CHINA
  • The 1-year loan prime rate (LPR) was kept unchanged today at 3.70% (consensus: 3.65%; JPM: 3.60%), while the 5-year LPR was lowered by 15bps to 4.45% (consensus: 4.55%; JPM: 4.50%).
  • JPM thinks there are two important reasons behind today’s unusual policy move.
  • First, the policy aims to provide some cushion against weak housing market activities. 70-city new home prices fell into contractionary territory in April at -0.1%oya, the first time in nearly 6.5 years.
    • Housing activity collapsed in April (the weakest moment on record, based on JPM housing activity index), and many private developers may be at the tipping point of triggering more defaults if there is no recovery in housing demand and improvement in funding conditions.
    • Hence, it is one of a series of measures (e.g. , city-level housing policy adjustments observed recently) to help stabilize the housing market.
  • Second, this could provide meaningful support to free up more disposable income for consumption as the recent Omicron outbreak has hurt the labor market pretty hard. Premier Li has recently emphasized on the importance of stabilizing the labor market and creating new jobs, as well as promoting consumption. The government is also considering a fiscal subsidy to promote auto sales in rural areas, likely introduced in June.
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