In this briefing:
- Understanding Chinese Monetary Policy: Trying Hard to Ease?
- UK: GDP Rebound Crushes Current Recession Fear
- Latest RRR cuts are only tactical and do NOT signal strategic monetary ease
- PBoC liquidity injections are the key monetary signal
- Liquidity jumped from May through July but August flat and September weak
- No indication yet that PBoC easing aggressively….but they will
- UK GDP growth exceeded expectations in July by 0.2pp at 0.35% m-o-m. The rest of Q3 is likely to be broadly flat but deliver growth of 0.4% q-o-q, in my view.
- Soft surveys sensationalised recession warnings after GDP already contracted in Q2. The fall was mostly narrowly concentrated within the Apr-19 industrial data while services growth keeps officially crushing the sentiment-biased surveys.