China: Has the PBOC entered a rate-hiking cycle? - Nomura
|Analysts at Nomura note that the People’s Bank of China (PBoC) Monetary Policy Implementation Report emphasised the curbing of financial risks and minimising asset bubbles, which suggests a marginal tightening bias for its “prudent and neutral” policy stance.
Key Quotes
“The monetary policy regime has shifted to focus on money market interest rates and open market operations (OMOs), so the rise in money market rates following the lunar new year holidays should be viewed as a rate hike, in our view.”
“The rising PPI does not appear to be a major concern for monetary policy.”
“We expect no further OMO rate hikes in the short term.”
“Rates strategy: We maintain a 2s5s repo-NDIRS flattener trade with a bias to add pay overlay on dips.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.