People's Bank of China Archives - Equichain Wealth Advisors

Global Market – U.S. & China’s economic data – Mix picture

This week we will discuss U.S. and China’s economic data which continue to give mix indication and two different strategies by world’s top two economy. U.S. continue to witness robust growth and inflation is key concern and on the other hand for China – recession & slowdown remain key concern.

U.S Economic data & key takeaways

U.S. economic data released this week indicates mix set and which will influence decision making for interest rate in upcoming FOMC meeting on 20-Sep-23. As guided by U.S. Fed chair Jerome Powell – Fed may pause at September meeting and wait for incoming data.

China’s Economic data & Steps

China’s Caixin manufacturing PMI came at 51 Vs expectation of 49 while PMI data released a day earlier came at 49.7 Vs estimate of 49.1.

China last week reduced tax on stock trading to boost confidence for the first time since April 2008. China’s central bank will trim the amount of foreign currency deposits banks are required to hold as deposits.

Equichain Wealth Advisors: Market View & Opinion

Recent steps by China could provide boost to consumption which will result in increase in commodity prices such as Crude oil & Metal. In this week, crude oil and metal prices have been rising. This increase in commodity prices will result in high inflation globally and increase worry for U.S.

Global market continues to indicate mix picture whereas Indian story is getting strong day by day. U.S. market continues to remain resilient where as China’s market is showing sign of stabilizing after measures of steps taken by Chinese government. We expect some positive move for global market in the month of September 2023.

Click on the attachment to read the full report:

Global Market – U.S. & China’s Economic data mix picture .pdf

Global Market – China’s economic recovery hits road block

This week we will discuss China’s growth momentum slows further and need further stimulus. China’s Central bank PBOC continues its support for YUAN as currency continues to weaken. China after following strict COVID policy since March 2020 has removed strict restriction from 8-Jan-23.

China June PMI @ 49 – reading below 50 is contraction

Speculation about potential policy support has been mounting as the recovery for the world’s second-largest economy loses traction. After a burst of activity in the first quarter, consumer spending is slowing. The housing rebound has fizzled, exports have weakened and infrastructure investment has been muted, too.

China’s PBOC Sticks with Yuan Support as Currency Losses Deepen

The central bank set its so-called fixing for the managed currency at a stronger-than-expected level on Friday, after the offshore yuan extended a seven-month low. The move came after reports that regulators have stepped up scrutiny of currency trading and cross-border capital flows, in a bid to stabilize the yuan.

China removes strong COVID restriction from January 2023

China after following zero tolerance COVID policy for more than 2 years since COVID in March 2020 has taken steps to remove restriction from January 2023 and support economy. Travelers coming into China were required to follow COVID restriction policy and go through quarantine period before of 7 days.

Equichain Wealth Advisors: Market View & Opinion

The People’s Bank of China will likely reduce the rate on its one-year policy loans — known as the medium-term lending facility — by 5 basis points to 2.6% in the final quarter of this year, according to the median estimate in the latest quarterly survey.

China economic data continues to show worrying sign where as US Fed, ECB & BOE continues to raise rates as inflation remains key risk in developed economy. Inflation is not a concern in China – 2nd largest economy. Global market continues to trade near its recent high market is factoring in some kind of stimulus and any weakness in economic recovery will be blessing for market and risk-on sentiment.

Click on the attachment to read the full report:

Global Market – China’s economic recovery hits road block.pdf