Nomura: Covid Presser Dashes Market's Hope Of A Fast Reopening

Nomura write “dashing last week’s enthusiasm for a fast reopening, markets will likely perceive the highly-anticipated Covid-19 press conference hosted by the State Council on the past Saturday as quite disappointing. The presser only provided a regular update of Covid situation, reiterated the guideline of firmly sticking to the zero-Covid strategy (ZCS), and announced there is no new protocol to replace the current 9th edition.”

• “We warned last week that markets should lower their expectations of a fast reopening. We continue to believe that, while Beijing may introduce some fine-tuning of Covid measures in coming weeks, those fine-tuning measures could be more than offset by local officials’ escalation of ZCS. We maintain our view that Beijing will stick with the essential parts of ZCS until at least March 2023. Switching the narratives will be a key challenge along the road to China’s reopening.”