PBOC has cut the RRR and SLF this week as the Yuan continues to fall, i guess the PBOC is ok with this we suppose. Chinese Equities werent too enthused, so much for the great China reopen!
Big question is if the Yuan is already in a down trend and the PBOC needs to push more stimulus and cuts, how bad must the underlying economy truly be??? This is a major development in the global bull case for equities, once the FRB cuts rates, equities will be revalued as credit crunch ensues and business, lending, credit evaporate.
Reserve Requirement Ratio and the Standing Lending Facility...like the US reserve requirement, but we do not have one any longer...and the discount window or TALFs plus the PBOC will most likely cut the 1Y MLF this week as well, seems forced not something they would want to do...in my opinion
Big question is if the Yuan is already in a down trend and the PBOC needs to push more stimulus and cuts, how bad must the underlying economy truly be??? This is a major development in the global bull case for equities, once the FRB cuts rates, equities will be revalued as credit crunch ensues and business, lending, credit evaporate.
What’s RRR and SLF?
Reserve Requirement Ratio and the Standing Lending Facility...like the US reserve requirement, but we do not have one any longer...and the discount window or TALFs plus the PBOC will most likely cut the 1Y MLF this week as well, seems forced not something they would want to do...in my opinion