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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.
CHINA
- China total aggregate financing rose slightly less than expected in November by 2.61tr CNY (vs. 2,696tr exp.), up from 1.59tr CNY the previous month.
- The annual change in 'liquidity', which we define as the annual change in China Total Social Financing (TSF) 12M sum, ticked up slightly from -5.16tr CNY to -4.83tr CNY.
- The top chart below shows that China liquidity has been contracting sharply in the past year, which has been weighing on both domestic and international asset prices.
- Hence, investors are questioning if liquidity conditions in China will start to ease gradually in 2022 along with PBoC cutting rates, which could benefit to domestic risky assets and especially equities (which are currently 'cheap' relative to other EM markets).
- The bottom chart shows that China liquidity has been an important 'driver' of tech stocks in the past cycle; periods of rising liquidity have been associated with higher tech equities and vice versa.
Source: Bloomberg/MNI
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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