China’s Market News: PBOC Releases New Policy Targets at 3Q Meeting
Friday, Sep 30, 2016 11:11 am -07:00
by Renee Mu, Currency Analyst
This daily digest focuses on Yuan rates, major Chinese economic data, market sentiment, new developments in China’s foreign exchange policies, changes in financial market regulations, as well as market news typically available only in Chinese-language sources.
- Yuan deposits in Hong Kong in August dropped to the lowest level since February 2013.
- The PBOC will provide moderate liquidity and guide credit and financing to grow at an appropriate rate.
- China’s securities regulator will remove limits on asset allocations under QFII and RQFII programs.
Key Economic Indicators for Yuan Rates
- Yuan-denominated deposits in Hong Kong dropped -2.1% to 652.9 billion Yuan in August from the month prior, according to Hong Kong Monetary Authority; this is the lowest level since February 2013. The deposits gauge can be used as a market sentiment indicator for the Chinese currency in its largest offshore center.
Before 2015, Yuan deposits in Hong Kong was in an upward trend amid the rising role of the currency in the region. In December 2014, Yuan deposits in the offshore center hit the highest level of 1.0036 trillion Yuan and moved around that level in early 2015. On August 11th, the Chinese currency was de-pegged against the U.S. Dollar. Since then, Yuan deposits in Hong Kong banks started to decline.
Data downloaded from Bloomberg; chart prepared by Renee Mu.
The level of Yuan deposits in Hong Kong is mostly consistent with moves in Dollar/Yuan rates. When the Yuan rose against the U.S. Dollar in early years, individuals and companies increased their Yuan holdings as well. After Yuan’s de-pegging, the currency has come under devaluation pressure. As a result, Hongkongers began to reduce their Yuan holdings.
Data downloaded from Bloomberg; chart prepared by Renee Mu.
- China’s Caixin manufacturing PMI print for September came out at 50.1 as expected, rising from 50.0 from the month prior. The read indicates a slight expansion in manufacturing sectors. However, amid production cuts as well as the slow growth in private investment, Chinese producers may still face pressure over the following months. The official PMI print for September to be released at 9pm EDT today will give out more clues on the conditions of Chinese manufacturing firms.
Data downloaded from Bloomberg; chart prepared by Renee Mu.
DailyFX Economic Calendar
Market News
PBOC News: China’s Central Bank.
- The PBOC said that Yuan’s official inclusion in SDR basket will ‘contribute to the stability of Yuan exchange rates’, according to a statement issued by the regulator on September 30th. Following Yuan’s official entry, it is expected that the overseas demand in Yuan-denominated assets will increase and the corresponding capital inflows will help to steady Yuan rates. The full text can be found here.
- The PBOC’s Monetary Policy Committee hosted the third quarter meeting and released policy targets for the following periods: the Central Bank will maintain prudent monetary policy and flexibly use multiple policy tools. The regulator will provide moderate liquidity and guide credit and financing to grow at an appropriate rate. In terms of exchange rates, the Central Bank will maintain Yuan rates stable within a reasonable range.
This week PBOC has been tightening onshore Yuan liquidity, which is unusual before a major holiday. We discussed that it signals the regulator continues on its tweaked short-term credit strategy. PBOC’s statement released on Friday confirms this intention. China’s home loans have been increasing at a rapid rate and contributed to the largest portion of New Yuan Loans. At the same time, financial institutions have taken advantage of cheap short-term funds provided by the Central Bank and purchased longer term bonds. Both activities increase the risk of price bubbles. As a result, the regulator set managing liquidity and credit growth as one of the major targets over the following periods.
Sina News: China’s most important online media source, similar to CNN in the US. They also own a Chinese version of Twitter, called Weibo, with around 200 million active users monthly.
- China’s securities regulator will remove restrictions on asset allocations under QFII and RQFII programs. Qualified foreign institutional investors may purchase Chinese stocks, bonds and other assets through these programs. Previously, the securities regulator issued guidance requiring QFII investors to place at least 50% of total assets in stocks and hold no more than 20% in cash. Under the new rule, investors may make their own decisions on asset allocations.
https://www.dailyfx.com/forex/fundamental/daily_briefing/daily_pieces/china_news/2016/09/30/Chinas-Market-News-PBOC-Releases-New-Policy-Targets-at-3Q-Meeting-.html?utm_source=AWeber&utm_medium=Mu&utm_campaign=em
Friday, Sep 30, 2016 11:11 am -07:00
by Renee Mu, Currency Analyst
This daily digest focuses on Yuan rates, major Chinese economic data, market sentiment, new developments in China’s foreign exchange policies, changes in financial market regulations, as well as market news typically available only in Chinese-language sources.
- Yuan deposits in Hong Kong in August dropped to the lowest level since February 2013.
- The PBOC will provide moderate liquidity and guide credit and financing to grow at an appropriate rate.
- China’s securities regulator will remove limits on asset allocations under QFII and RQFII programs.
Key Economic Indicators for Yuan Rates
- Yuan-denominated deposits in Hong Kong dropped -2.1% to 652.9 billion Yuan in August from the month prior, according to Hong Kong Monetary Authority; this is the lowest level since February 2013. The deposits gauge can be used as a market sentiment indicator for the Chinese currency in its largest offshore center.
Before 2015, Yuan deposits in Hong Kong was in an upward trend amid the rising role of the currency in the region. In December 2014, Yuan deposits in the offshore center hit the highest level of 1.0036 trillion Yuan and moved around that level in early 2015. On August 11th, the Chinese currency was de-pegged against the U.S. Dollar. Since then, Yuan deposits in Hong Kong banks started to decline.
Data downloaded from Bloomberg; chart prepared by Renee Mu.
The level of Yuan deposits in Hong Kong is mostly consistent with moves in Dollar/Yuan rates. When the Yuan rose against the U.S. Dollar in early years, individuals and companies increased their Yuan holdings as well. After Yuan’s de-pegging, the currency has come under devaluation pressure. As a result, Hongkongers began to reduce their Yuan holdings.
Data downloaded from Bloomberg; chart prepared by Renee Mu.
- China’s Caixin manufacturing PMI print for September came out at 50.1 as expected, rising from 50.0 from the month prior. The read indicates a slight expansion in manufacturing sectors. However, amid production cuts as well as the slow growth in private investment, Chinese producers may still face pressure over the following months. The official PMI print for September to be released at 9pm EDT today will give out more clues on the conditions of Chinese manufacturing firms.
Data downloaded from Bloomberg; chart prepared by Renee Mu.
DailyFX Economic Calendar
Market News
PBOC News: China’s Central Bank.
- The PBOC said that Yuan’s official inclusion in SDR basket will ‘contribute to the stability of Yuan exchange rates’, according to a statement issued by the regulator on September 30th. Following Yuan’s official entry, it is expected that the overseas demand in Yuan-denominated assets will increase and the corresponding capital inflows will help to steady Yuan rates. The full text can be found here.
- The PBOC’s Monetary Policy Committee hosted the third quarter meeting and released policy targets for the following periods: the Central Bank will maintain prudent monetary policy and flexibly use multiple policy tools. The regulator will provide moderate liquidity and guide credit and financing to grow at an appropriate rate. In terms of exchange rates, the Central Bank will maintain Yuan rates stable within a reasonable range.
This week PBOC has been tightening onshore Yuan liquidity, which is unusual before a major holiday. We discussed that it signals the regulator continues on its tweaked short-term credit strategy. PBOC’s statement released on Friday confirms this intention. China’s home loans have been increasing at a rapid rate and contributed to the largest portion of New Yuan Loans. At the same time, financial institutions have taken advantage of cheap short-term funds provided by the Central Bank and purchased longer term bonds. Both activities increase the risk of price bubbles. As a result, the regulator set managing liquidity and credit growth as one of the major targets over the following periods.
Sina News: China’s most important online media source, similar to CNN in the US. They also own a Chinese version of Twitter, called Weibo, with around 200 million active users monthly.
- China’s securities regulator will remove restrictions on asset allocations under QFII and RQFII programs. Qualified foreign institutional investors may purchase Chinese stocks, bonds and other assets through these programs. Previously, the securities regulator issued guidance requiring QFII investors to place at least 50% of total assets in stocks and hold no more than 20% in cash. Under the new rule, investors may make their own decisions on asset allocations.
https://www.dailyfx.com/forex/fundamental/daily_briefing/daily_pieces/china_news/2016/09/30/Chinas-Market-News-PBOC-Releases-New-Policy-Targets-at-3Q-Meeting-.html?utm_source=AWeber&utm_medium=Mu&utm_campaign=em
Today at 7:52 am by Rocky
» utube 3/28/24 MM&C Iraqi Dinar - IQD Update - SWIFT - Purchasing Power - Urban Renaissance - Releas
Today at 7:51 am by Rocky
» Al-Mandalawi: Iraq is witnessing competition between major companies...and the House of Representati
Today at 7:49 am by Rocky
» The President of the Republic stresses the importance of the role of programmers in developing the w
Today at 7:46 am by Rocky
» The Minister of Industry and Minerals follows up on the technical and production performance of the
Today at 7:45 am by Rocky
» The Minister of Finance is following up on the field the progress of the newly implemented ASYCUDA s
Today at 7:44 am by Rocky
» Statistics: There are more than 15 million bank accounts in Iraq
Today at 7:42 am by Rocky
» Representative: One paragraph hinders the passage of a general amnesty within the House of Represent
Today at 7:37 am by Rocky
» Parliamentary Finance: “The draft federal budget law will be devoid of new job grades.”
Today at 7:36 am by Rocky
» Parliamentary action to resolve the fate of “food security contracts” in 15 governorates
Today at 7:35 am by Rocky
» 300 factories turned into "iron scrap" in Diyala
Today at 7:34 am by Rocky
» A deputy expects the dollar exchange rate to reach 140 Iraqi dinars
Today at 7:32 am by Rocky
» Al-Yasiri: The American administration is working hard to destroy the Iraqi economy
Today at 7:31 am by Rocky
» Infographic: The highest annual salaries of leaders of Arab countries
Today at 7:30 am by Rocky
» Communications announces that the electronic signature project has reached advanced stages
Today at 7:29 am by Rocky
» Parliamentary Integrity presents a file related to Kuwaiti violations of Iraqi oil
Today at 7:27 am by Rocky
» Parliamentary move to include amendments to Parliament’s internal regulations on the agenda (documen
Today at 7:25 am by Rocky
» The Iraqi President urges the Minister of Finance to expedite the payment of salaries to the Kurdist
Today at 7:23 am by Rocky
» Central Bank of Iraq sales exceeded $251 million at today’s auction
Today at 7:21 am by Rocky
» The Foreign Minister questions the "Iraqi resistance" attacks against Israel: the other side did not
Today at 7:20 am by Rocky
» The Minister of Labor announces progress in the electronic payment system
Today at 7:17 am by Rocky
» Interior Ministry: For the first time, we controlled the smuggling of petroleum derivatives by 98 pe
Today at 7:16 am by Rocky
» International companies offer offers to invest in the Dhi Qar marshes.. What distinguishes them?
Today at 7:15 am by Rocky
» “Tough” comments on interest rates raise the dollar globally
Today at 7:14 am by Rocky
» Iraq is the fifth largest oil supplier to South Korea in a month
Today at 7:12 am by Rocky
» Recovering more than 100 billion as a result of more than 200,000 employees on social welfare
Today at 7:11 am by Rocky
» The Sudanese consultant announces the completion of Baghdad Metro track designs
Today at 7:08 am by Rocky
» Al-Sudani stresses ending the problem of triple-shift schools
Today at 7:07 am by Rocky
» Iraq begins building two new tankers to transport petroleum products
Today at 7:06 am by Rocky
» Forming a council for “competition and preventing monopoly”
Today at 7:04 am by Rocky
» Features of an Iraqi-Turkish agreement regarding the status of the Kurdistan Workers’ Party
Today at 7:02 am by Rocky
» {Al-Buzrajiya} between the hammer of fraud and the power of the owners
Today at 7:01 am by Rocky
» Ministry of Oil: The gas sector is witnessing great development
Today at 6:59 am by Rocky
» An agreement with Britain in the field of securities
Today at 6:58 am by Rocky
» Discussions between Baghdad and Ankara to open a new port
Today at 6:57 am by Rocky
» Trade: About 11 million citizens updated their new card information
Today at 6:56 am by Rocky
» Electronic payment is sustainable growth
Today at 6:55 am by Rocky
» Experts: Iraq qualifies to be an important tourist country
Today at 6:54 am by Rocky
» Amending the Health Professions Law “robs” scientists of the central appointment 3 years after it wa
Today at 5:20 am by Rocky
» Is the “blessings package” that Erbil paid to the citizens of Kurdistan related to the elections?
Today at 5:19 am by Rocky
» Exceeded 5,000 projects.. Allocating 10 trillion dinars to support governorate reconstruction plans
Today at 5:18 am by Rocky
» “His need no longer exists.” Parliamentary Finance confirms the necessity of returning the retiremen
Today at 5:17 am by Rocky
» To communicate with the bases... 12 directives from Al-Sadr, including blocking numbers for non-gove
Today at 5:15 am by Rocky
» In an interview with "Baghdad Today"... an Iranian researcher reveals the importance of Haniyeh's vi
Today at 5:14 am by Rocky
» After it was 63 trillion in 2023... the 2024 budget deficit will rise to 80 trillion dinars
Today at 5:13 am by Rocky
» Parliament reveals the date of the first evaluation of the governors and determines the party respon
Today at 5:11 am by Rocky
» The President of the Republic informs Al-Araji and Al-Basri: Momentum must be mobilized to eliminate
Today at 5:10 am by Rocky
» Can the Federal Court sue others? A legal clarification of its response mechanism to abuse
Today at 5:09 am by Rocky
» Despite promises to soon stop burning gas.. What is the secret behind Iraq renewing the Iranian gas
Today at 5:07 am by Rocky
» Advisor to Al-Sudani: The dollar is on the way to further decline, and 70% of Iraqi traders have ent
Today at 5:06 am by Rocky
» Iraq exported more than 99 million barrels of oil last February
Today at 5:04 am by Rocky
» Barzani “gives good news” to Kurdistan employees: salaries, land, and loan exemptions
Today at 5:03 am by Rocky
» Alia Nassif: Nour Zuhair returned to the port of Umm Qasr to make deals.. An influential Shiite forc
Today at 5:02 am by Rocky
» The Prime Minister announces the movement of nearly 500 stalled projects
Today at 5:00 am by Rocky
» A government strategy to enhance investments.. Iraq is on the verge of a new era of economic develop
Today at 4:59 am by Rocky
» Ranging between 20% and 50%.. The Kurdistan government decides to reduce service fees, customs dutie
Today at 4:58 am by Rocky
» Al-Sudani: The reform approach in the security services is an integral part of reform in other secto
Today at 4:56 am by Rocky
» Everyone in Iraq wants the Sudanese visit to Washington to be successful, even the factions!
Today at 4:55 am by Rocky
» Sources and experts expect the agenda.. in his bag is the Baghdad dollar and the factions’ truce, bu
Today at 4:54 am by Rocky
» The decision to raise gasoline prices arouses the ire of drivers...a reminder of the large demonstra
Today at 4:53 am by Rocky
» Parliamentary services: 3 important hospitals in Baghdad will enter service at the end of the year
Today at 4:52 am by Rocky
» Iraq signs a contract to supply Iranian gas for a period of five years
Today at 4:50 am by Rocky
» Parliament adds a voting paragraph on amending the Penal Code to its agenda
Today at 4:49 am by Rocky
» His political advisor: We are not afraid of Sudanese entering the elections alone
Today at 4:48 am by Rocky
» Parliamentary services explain the reasons for the rise in real estate prices in Baghdad
Today at 4:46 am by Rocky
» Attia, criticizing the government's decisions: "The citizen's feathers will be ruffled without servi
Today at 4:45 am by Rocky
» Parliamentary Communications: Zain Iraq and Asiacell did not pay their debts
Today at 4:44 am by Rocky
» The Governor of Karbala announces the imminent establishment of the largest industrial city in the c
Today at 4:43 am by Rocky
» A government determination to end the issue of displaced persons in the middle of this year
Today at 4:42 am by Rocky
» Iraq buys gas from Kurdistan to generate electricity
Today at 4:41 am by Rocky
» Parliamentary signatures to include an amendment to the internal regulations to decide the choice of
Today at 4:40 am by Rocky
» In Basra.. a demonstration against foreign workers in Iraqi companies (video)
Today at 4:38 am by Rocky
» Al-Samarrai: Presidency of Parliament is an entitlement to the constituents, and calling it a “frame
Today at 4:36 am by Rocky
» Electronic food supplies in 6 governorates... covering 11 million Iraqis and “writing off” about 700
Today at 4:34 am by Rocky
» Corruption of the Ministry of Transport.. Representatives express their surprise at the minister’s s
Today at 4:32 am by Rocky
» The biggest supporter of the invasion of Iraq.. The death of former US Senator Joe Lieberman
Today at 4:31 am by Rocky
» Iraq is ranked “late.” A list of the most and least safe Arab countries for women
Today at 4:30 am by Rocky
» The Council of Ministers exempts the Gulf Interconnection Authority from guarantee fees: it is a gov
Yesterday at 7:48 am by Rocky
» The Iraqi government raises the size of the 2024 budget, and Parliament is “surprised”
Yesterday at 7:46 am by Rocky
» Popular Movement: We have many economic options away from American hegemony
Yesterday at 7:42 am by Rocky
» The Oil Parliament stresses the need to transfer part of the revenues to the producing governorates
Yesterday at 7:41 am by Rocky
» It will cover 14 regions in eastern Iraq.. A deputy reveals the “border electricity” project
Yesterday at 7:40 am by Rocky
» Experts Warn Mass Migration Threatens US Food Security
Yesterday at 7:37 am by Bama Diva
» Al-Fateh: America occupies Iraq through agreements
Yesterday at 7:37 am by Rocky
» Anger in Iraq over a "sudden decision"... and a reminder of a "general strike" that paralyzed the co
Yesterday at 7:34 am by Rocky
» Parliamentary Committee: Parliament is discussing today a decision that “disturbed” the Iraqis
Yesterday at 7:33 am by Rocky
» Ministry of Electricity: Our production will reach 27 thousand megawatts by May
Yesterday at 7:31 am by Rocky
» Diagnosing the “most important” problems in the oil file between Baghdad and Erbil.. What is the rel
Yesterday at 7:30 am by Rocky
» The Iraqi Fiqh Academy and the Sunni Endowment issue a fatwa to pay Zakat al-Fitr
Yesterday at 7:28 am by Rocky
» The National Bank of Iraq continues its digital transformation by launching its new banking system a
Yesterday at 7:26 am by Rocky
» Parliamentary Investment and the Central Bank are discussing the housing initiative
Yesterday at 7:25 am by Rocky
» The Prime Minister announces the restart of 500 suspended projects
Yesterday at 7:23 am by Rocky
» Al-Barti assesses the region's employees: Your salaries are insured and will be paid after resettlem
Yesterday at 7:21 am by Rocky
» Iraqi-American discussions in anticipation of the Sudanese visit
Yesterday at 7:20 am by Rocky
» Iraq and Turkey hold meetings in Ankara to discuss technical issues related to the development road
Yesterday at 7:17 am by Rocky
» A government parliamentary agreement to support budget revenues and governorate allocations for inve
Yesterday at 7:16 am by Rocky
» Oil: The gas sector is witnessing great development
Yesterday at 7:15 am by Rocky
» A Kurdish-French agreement to develop trade and economic relations
Yesterday at 7:13 am by Rocky
» Exchange companies in Mosul demand that they be entered into the currency selling window
Yesterday at 7:12 am by Rocky