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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.
Executive summary:
- As China liquidity continues to surge following the PBoC June report data on aggregate financing, investors have been questioning if the counter cyclical policy in China will be enough to stimulate risky assets.
- In the past cycle, a sharp increase in liquidity has generally been associated with a rebound in world equities and a weaker Dollar.
- However, with market visibility and conviction so poor at this stage, and with Covid uncertainty clashing with geopolitical risks, implied vol could remain elevated going forward.
Link to full publication:
MNI MARKETS ANALYSIS - China Credit - Final.pdf
As China liquidity continues to surge following the PBoC June report data on aggregate financing, investors have been questioning if the counter cyclical policy in China will be enough to stimulate risky assets. In the past cycle, a sharp increase in liquidity has generally been associated with a rebound in world equities.
The chart below shows that China ‘liquidity’ has strongly led World equities in the past 15 years.
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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