People’s Bank of China cut the rate on its Medium-term Lending
Facility (MLF) today. There was a 600bn MLF maturing. The Bank rolled
over 400bn yuan into a fresh 1-year MLF loan. The reduced amount
appears in response to the ‘liquidity trap’ unfolding in China
where plentiful cash is sloshing about but demand for loans is
rate was dropped to 2.75% from 2.85% previously. The rate on the
daily 7-day reverse repo open market operations was dropped also, to
2.0% from 2.1%.
the news of the rate cuts we had July ‘activity’ data published.
The data was poor, with a series of misses on estimates. For the
property sector specifically the news was just awful (it has been for
some time). ICYMI the sector has been imploding under a vast debt
major FX the USD appreciated on the session.
AUD, NZD, GBP, CAD are all lower against the dollar. USD/JPY has
fallen away on the session but is up from its sub-133.00 lows earlier
in the session.
Offshore yuan lost ground on the rate cut news: