China Weekly Dynamics: Policy Easing After Data Weakness

Crédit Agricole CIB expects China to increase policy easing following weak April economic data, though US-China trade tensions are easing post-summit. The focus will likely be on fiscal stimulus and targeted credit rather than central bank rate cuts.

Key Takeaways

• 1.Incremental policy easing is expected to step up following significant downside surprises in China's April macro activity data.
• 2.The CNY has bucked the trend of a stronger USD, showing resilience due to constructive US-China summit outcomes and trade relations.
• 3.PBoC is likely to stay sidelined on broad rate cuts, focusing instead on targeted credit support as inflation rises.

Table of Contents

• Macro: after US-China summit and April data release
• CNY repriming; rates watch for fiscal response
• Asset overview and flows
• Macro: Trade dynamics
• Macro: demand and supply snapshot
• Macro: prices and inflation
• Macro: monetary and fiscal condition
• FX market: Market dynamics
• FX market: Macro Fundamentals
• FX market: Forwards & options
• Fixed income market: performance
• Fixed income market: Money market and liquidity
• Fixed income market: Primary market
• Fixed income market: Interbank bond holding
• Calendar

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