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No Surprises from China

China was not going to be left out of all the CBank fun this week. In a surprise move and for the second time in less than a month, the PBoC has lowered the one-year rate by -0.31% and the deposit rate by -0.25%. Policy makers have obviously taken a peek at next week’s data and the easing is a good indicator in what to expect for growth and inflation releases. Internal reporting supposedly is beginning to show that domestic bank lending was lower last month than in May. This is a capital markets worry as Chinese economic recovery depends greatly on a rebound in credit growth. The cut is a “welcoming step in the easing process which tends to lower the real interest rate.” For China and the rest of us, the quantity of liquidity is paramount; so expect the PBoC to remain on the loose side of policymaking.

Below are some other highlights of the week:


ASIA

 


AMERICAS Week in FX


EUROPE Week in FX

 

WEEK AHEAD

  • This week is dominated by trade/growth data reported in CNY, CAD and USD
  • CNY has CPI and USD PPI
  • FOMC has its minutes and the BoJ its rate decision announcement
  • Unemployment and claims come from AUD and USD
  • Business and consumer sentiment is released in CAD and USD
  • GBP has manufacturing production to digest

 

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Dean Popplewell

Dean Popplewell [5]

Vice-President of Market Analysis at MarketPulse [6]
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell
Dean Popplewell

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