On Thursday Barclays downgraded its "2019.....>

CHINA: On Thursday Barclays downgraded its "2019 China GDP growth forecast to

6.2% from 6.5% on softening credit growth and activity. Our new forecast also

assumes moderate policy stimulus efficacy and imposition of 20% tariffs of on

all Chinese exports to the US by mid 2019. We now expect the trade-weighted CNY

to weaken 2-3% in H1 19 as tariffs are increased and broadened, implying a move

in USDCNY to 7.15 by Q2 19 versus 6.95 previously. The CNY is not likely to

depreciate into year-end 2018, however, given that financial stability remains a

policy priority, as well as continued uncertainty on the size, timing and impact

of additional tariffs. The upcoming Trump-Xi meeting will be important in this

regard. A de-escalation of the trade war likely would deliver a longer period of

CNY stability, while a further deterioration in growth likely would see CNY

depreciation used as part of China's policy response, despite its low efficacy."