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China: RRR cut to help rates market sentiment, less so for RMB - ANZ

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Mar 1, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    Research Team at ANZ, suggests that the China’s RRR cut by 50bps is positive for bond market sentiment.

    Key Quotes

    • “Concerns over supply will remain given the possibility that China’s budget deficit could increase to 3% of GDP or higher.

    • Despite this, we believe the bullish trend for the bond market will remain.

    • However, previous RRR cuts have tended to be negative for the currency, though we expect the authorities to maintain stability in the RMB basket, which will limit yuan depreciation pressure.”
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