Summary Of PBoC's Press Conference

Some key take aways from today's PBoC press conference.

• The PBoC press conference didn't appear to suggest monetary policy was going to be eased in the near term. The level of real rates was deemed appropriate, while the overall amount of credit in the system would be maintained at an adequate level as well.
• There would be no large scale stimulus, but this line has been used many times before, while monetary policy will be adjusted when the timing is appropriate.
• On the FX side, greater yuan volatility is here to stay, although the managed float system should be persisted with. The yuan will also be kept at a stable level, while the 7.00 level is no longer seen as a psychological level, having been broken on a number of occasions.
• There was also lots of points around increased yuan use and the long term appeal of yuan denominated investments.
• As other officials have noted recently, PBoC Governor Yi stated that external demand remains weak. Deputy Governor Pan also noted most institutions see China 2023 growth around 5%.
• Consumption growth was expected to pick up gradually, as risk averse behavior from households subsides. Insufficient demand is seen as the main source of weakness for the economy.
• There were mixed comments on the property sector. The line that it should not be used for speculation was reiterated, while Deputy Governor Pan noted banks are being guided to provide normal financing activity. The property sector will also be pushed towards a new development mode.
• The market reaction has been fairly muted. Onshore equities are off session highs, while USD/CNH is back above 6.9100. The earlier dip sub 6.9000 finding support. We remain within Thursday ranges though. Onshore bond yields are slightly higher for the session, 10yr to 2.92%