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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
A quick reminder that the PBoC is set to conduct its latest round of 1-Year MLF operations later today.
- CNY200bn of 1-Year MLF is set to roll off on Friday (18 February), with expectations for the PBoC to rollover those maturing funds in today’s operations (at a minimum).
- Focus will also fall on the rate applied to the operations. 16 of the 27 surveyed by Bloomberg look for the PBoC to leave the rate applied to the operations unchanged at 2.85%, while 5 look for a 5bp cut and the remaining 6 look for a 10bp cut. A reminder that the PBoC cut the rate applied to its 1-Year MLF operations by 10bp in January (the first cut to the rate since April ’20), as part of its broader pro-growth easing package. Many expect further easing by the PBoC during H122, a period that some suggest is the window of opportunity for the Bank to act, given expectations surrounding tightening from the U.S. Federal Reserve during the remainder of the year.
- Questions surrounding broader manufacturing activity, worries re: the property sector, sluggish LNY holiday activity and continued localised Omicron lockdowns headline the worries that the Chinese economy faces at present.
- Some have suggested that last month’s rate cuts will need to be followed up with further easing, to foster additional household and corporate credit demand (note that Chinese credit data for January revealed record new loan issuance).
Fig. 1: PBoC 1-Year MLF Interest Rate (%)
Source: MNI - Market News/Bloomberg
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
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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