MNI China Daily Summary: Thursday, July 25

MNI BRIEF: Japan Govt Keeps Econ View, Cuts Exports

MNI: PBOC Conducts CNY200 Bln via MLF Thurs; Rate Cut

MNI: PBOC Sets Yuan Parity Lower At 7.1321 Thurs; -1.92% Y/Y

CHINA PBOC CONDUCTS CNY235.1 BILLION VIA 7-DAY REVERSE REPOS THURS

CHINA SETS YUAN CENTRAL PARITY AT 7.1321 THURS VS 7.1358

Aircraft-Led Durables Collapse Masks Rebound In Core Orders

MNI: BELGIUM JUL BNB BUSINESS SURVEY -12.3

MNI: US Q2 GDP +2.8%

RPT-MNI: Canada Sticks To Fiscal Anchors, Spends Chunk Of Windfall

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Tax Bill Changes Support BRL Outperformance

BRAZIL
  • BRL strengthened on Tuesday, contradicting regional weakness and firmer dollar indices. After an initial spike in USDBRL to 5.2219, the pair gradually reversed to close marginally lower on the day at 5.1634. This marked an important consolidation of strong Real gains from Monday. Supportive price action was aided by changes to the tax bill.
  • The new draft for Brazil's tax overhaul offered a bolder cut in corporate income taxes while also addressing some of the market's main concerns about the original text. (Bloomberg)
    • It kept one of the most controversial parts of Guedes's bill: a 20% levy on dividends, which has received pushback from companies and lawmakers since it was disclosed. The new draft specifies that levies don't apply to dividends paid to a holding, but the 20% rate was maintained.
    • Stocks erased losses after Sabino signalled the changes on dividend taxes and an exemption for real estate funds.
  • Brazil's Congress plans to go into recess next week, lower house speaker Arthur Lira said to journalists in Brasilia.
    • 2022 budget guidelines should be voted on Thursday or Friday, he said
    • Tax reform text may have some adjustments
    • The reform is neutral, fair, modern and has a large revenue waiver (BBG)
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