MNI China Daily Summary: Friday, April 19

MNI BRIEF: China Hog Market More Balanced In Q2 - Ministry

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

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

MNI: PBOC Sets Yuan Parity Higher At 7.1046 Fri; -5.03% Y/Y

CHINA SETS YUAN CENTRAL PARITY AT 7.1046 FRI VS 7.1020

INE Business Confidence Data Supports Upward Revisions In Q1 GDP Forecasts

MNI: GERMANY FEB PRODUCER PRICES -2.9% Y/Y

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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JPMorgan Maintaining View Of Stable Rates Until Mid-2023

BRAZIL
  • JPMorgan believe that BCB will keep the policy rate on hold at 13.75% next week, in line with consensus and despite the market pricing of chances of a hike at this and coming meetings. They note that the bar for a hike at the next meeting is high, maintaining their view of stable rates until mid-2023.
  • However, JPM recognise the rising odds that rates stay high for longer next year, given the asymmetrical risks toward looser-than-expected fiscal policy and a more challenging global outlook if a new round of global monetary tightening is required at some point next year.
  • There were improvements in Brazil’s inflation and signals of economic growth deceleration since the last meeting, but the highlight is that fiscal uncertainty increased substantially. This fiscal discussion should dominate the debate around the next monetary policy decisions. Absent of any confirmation on the fiscal decisions, it seems optimal to avoid pre-committing to any given scenario next week.
  • As far as the statement is concerned, BCB should recognize that the balance of risks deteriorated since the last meeting, in line with recent speeches. BCB should also mention in the statement that a deterioration of the fiscal path pressures the country’s risk premium and that the elevated fiscal risk could create an upward asymmetry in the balance of risks.
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