Back
10 Feb 2015
Chinese interest rate cut this month? – Investec
FXStreet (Barcelona) - The Investec Team comments that with Chinese inflation hitting a five year low and expectations for a further policy stimulus rising, a major US bank has predicted for a rate cut in China as early as this month.
Key Quotes
“Overnight Chinese annual consumer inflation hit a five year low while factory deflation worsened, highlighting weakness in the world's second largest economy and perhaps putting pressure on policy makers to inject more stimulus after last week's cut to the Reserve Requirement Ratio.”
“The poor data gave a boost to the Australian and New Zealand currencies as investors anticipate more easing in China, assuming this will lead to more Chinese demand for Australia and New Zealand's hard and soft commodities respectively.”
“One major US bank is even predicting a Chinese rate cut as soon as this month - as sluggish commodity prices continue to drag inflation lower, the Peoples Bank of China is expected to cut rates to lower the cost of capital.”
Key Quotes
“Overnight Chinese annual consumer inflation hit a five year low while factory deflation worsened, highlighting weakness in the world's second largest economy and perhaps putting pressure on policy makers to inject more stimulus after last week's cut to the Reserve Requirement Ratio.”
“The poor data gave a boost to the Australian and New Zealand currencies as investors anticipate more easing in China, assuming this will lead to more Chinese demand for Australia and New Zealand's hard and soft commodities respectively.”
“One major US bank is even predicting a Chinese rate cut as soon as this month - as sluggish commodity prices continue to drag inflation lower, the Peoples Bank of China is expected to cut rates to lower the cost of capital.”