MNI China Daily Summary: Friday, April 26

MNI BRIEF: China, US Should Strengthen Dialogue, Cooperation

MNI BRIEF: SNB Framework Reform 'Playing With Fire' - Steiner

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 Lower At 7.1056 Fri; -4.56% Y/Y

MNI: BAKER HUGHES US RIG COUNT 613; OIL RIGS 506; GAS RIGS 105

MNI: UNIV OF MICHIGAN CONSUMER SENTIMENT FINAL APR INDEX 77.2

EZ/UK T-Bill Calendar: Germany, France Auction on Monday

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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MNI Chile Central Bank Preview - April 2024: Risk of More Moderate Rate Cuts

Large inflation surprises, an increase in inflation expectations and a more cautious Fed support case for moderation in the pace of rate cuts

LatAm Bank - PreviewHomepageCentral Bank of Chile - PreviewEM Central Bank ReportsEM Central Bank PreviewEmerging Market News

Executive Summary:

  • Large inflation surprises since the last meeting, an increase in inflation expectations and a more cautious Fed stance support the case for a moderation in the pace of rate cuts this month
  • Weakness in CLP will also be a consideration, although BCCh commentary suggest that they think the pass-through to inflation has been limited
  • Analysts remain divided, with some expecting another 100bp move

Survey data published by the central bank over the last month show that analysts have shifted their expectations towards a 75bp rate cut at next week’s MPC meeting. The BCCh economist survey, published earlier in March, indicated that 53% of respondents expect a 75bp move on April 2nd, while this week’s BCCh traders survey also revealed that market participants expect a 75bp cut to 6.5%. This suggests that a slowdown in the easing pace, from 100bp in January, is the most likely scenario next week. Beyond that, traders expect a further 75bp move in May, followed by 50bp in June, with the policy rate declining to 4.25% in 12 months’ time.

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Executive Summary:

  • Large inflation surprises since the last meeting, an increase in inflation expectations and a more cautious Fed stance support the case for a moderation in the pace of rate cuts this month
  • Weakness in CLP will also be a consideration, although BCCh commentary suggest that they think the pass-through to inflation has been limited
  • Analysts remain divided, with some expecting another 100bp move

Survey data published by the central bank over the last month show that analysts have shifted their expectations towards a 75bp rate cut at next week’s MPC meeting. The BCCh economist survey, published earlier in March, indicated that 53% of respondents expect a 75bp move on April 2nd, while this week’s BCCh traders survey also revealed that market participants expect a 75bp cut to 6.5%. This suggests that a slowdown in the easing pace, from 100bp in January, is the most likely scenario next week. Beyond that, traders expect a further 75bp move in May, followed by 50bp in June, with the policy rate declining to 4.25% in 12 months’ time.

Keep reading...Show less