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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
CHINA
- China total aggregate financing rose less than expected in February by 1.19tr CNY (vs. 2.2tr expected), down from 6.17tr CNY the previous month.
- The 1.19tr CNY increase marks a downward tick in the YoY change in the Total Social Financing (TSF) 12M sum, which we also define as 'liquidity' (top chart).
- Even though there is strong seasonality in China TSF data, we previously saw that officials may need to accelerate the easing policy (either more liquidity or rate cuts) in the coming months to stimulate both the economic activity and risky assets.
- It seems that the PBoC ‘easing effort’ has just been enough to offset the significant economic losses coming from the ‘Zero-Covid Policy’.
- In addition, global risk off, renewed crackdown fears and downward revision in growth expectations have left equities vulnerable in recent weeks.
- The bottom chart shows that China liquidity has been an important 'driver' of tech stocks in the past cycle; periods of rising liquidity have been associated with higher tech equities and vice versa.
Source: Bloomberg/MNI
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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