China’s Market News: Top Priorities for the Economy in 2017
Monday, Dec 19, 2016 11:19 am -08:00
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 gained against a basket of currencies despite losses against the U.S. Dollar last week.
- “Maintaining stability while seeking progress” has been set as China’s main theme for 2017.
- If you’re looking for more trading ideas, check out our Trading Guides.
Yuan Rates
- The Chinese currency gained against a basket of currencies last week despite losses against the U.S. Dollar. While the Yuan weakened -0.77% onshore and -0.56% offshore against the Dollar, all three Yuan indexes increased over the same span of time. The CFETS Yuan Index, BIS Yuan Index and SDR Yuan Index rose +0.31%, +0.48% and +0.38% respectively.
Data downloaded from Bloomberg; chart prepared by Renee Mu.
At the same time, both onshore and offshore Yuan borrowing costs remained elevated, although for different reasons.
In the onshore market, the PBOC has been injecting cash in the effort to meet the liquidity need. On Monday, the Central Bank added a net of 65 billion Yuan through reverse repos; however, Yuan funding costs from overnight to 1 year in Shanghai interbank market continued to climb up. In specific, 1-month and 3-month SHIBOR hit the highest levels since July 2015; 1-month SHIBOR has increased for 28 trading days in a row and 3-month SHIBOR rose for 43 consecutive trading days.
While the onshore tightening is mostly resulted from increasing demand in liquidity, the offshore uneased condition is more likely led by intended cuts in supply. The overnight HIBOR remained at 10.00%, which makes it relatively expensive to short the Yuan.
Market News
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.
- Chinese top policymakers have set strategies for the economy in 2017 at the annual Central Economic Work Conference held last week. Here are the highlights and analysis:
China’s economic growth has slowed down to 6.7% in the first to third quarter in 2016. It is expected to drop further to 6.5% in 2017 according to a report released by the Chinese Academy of Social Sciences, a leading Chinese think tank, on December 19th. Within such context, maintaining stability in the economy as well as in financial markets has been set as the country’s top priority among all.
Chinese policymakers see supply-side reforms to be inevitable when solving this fundamental issue and will continue to implement reforms despite of short-term pains brought by them.
A good example for balancing stability and reforms is the recent regulators’ move on the coal market. Coal producers have been required to cut excessive capacity since the beginning of 2016. As it approach to winter, coal prices began to soar in October amid concerns and speculation on insufficient supply of utilities. On one hand, the National Development and Reform Commission (NDRC) worked with coal producers and commodities exchanges in the effort to maintain short-term stability in supply and price. On the other hand, the regulator reiterated that coal producers will still need to reduce low-quality supply in a longer term.
We may see more fiscal measures designated to support the economy over the following periods, such as increased fiscal budgets, additional tax cuts as well as government-led projects; monetary policy may be used more to deal with the liquidity dilemma.
More tightened rules on financial markets are likely to be introduced from top regulators, including the PBOC, CSRC, CBRC and CIRC.
The Conference emphasized on the real estate sector in specific, restricting loans to be issued to speculators in the housing market. China’s Central Bank will likely continue to work with local governments and commercial banks to strengthen oversight on home loans.
Debt-to-equity swap has been introduced as a major solution; private companies are also encouraged to use other market-driven approaches to reduce their high leverage.
China Finance Information: a finance online media administrated by Xinhua Agency.
- The PBOC will include off-balance sheet wealth management products (WMPs) into its Macro Prudential Assessment, a system to evaluate banks’ risks, beginning in 1Q 2017. This measure was first mentioned in October, as a move of the Central Bank to strengthen oversight on commercial banks.
https://www.dailyfx.com/forex/fundamental/daily_briefing/daily_pieces/china_news/2016/12/19/Chinas-Market-News-Top-Priorities-for-the-Economy-in-2017.html?utm_source=AWeber&utm_medium=Mu&utm_campaign=em
Monday, Dec 19, 2016 11:19 am -08:00
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 gained against a basket of currencies despite losses against the U.S. Dollar last week.
- “Maintaining stability while seeking progress” has been set as China’s main theme for 2017.
- If you’re looking for more trading ideas, check out our Trading Guides.
Yuan Rates
- The Chinese currency gained against a basket of currencies last week despite losses against the U.S. Dollar. While the Yuan weakened -0.77% onshore and -0.56% offshore against the Dollar, all three Yuan indexes increased over the same span of time. The CFETS Yuan Index, BIS Yuan Index and SDR Yuan Index rose +0.31%, +0.48% and +0.38% respectively.
Data downloaded from Bloomberg; chart prepared by Renee Mu.
At the same time, both onshore and offshore Yuan borrowing costs remained elevated, although for different reasons.
In the onshore market, the PBOC has been injecting cash in the effort to meet the liquidity need. On Monday, the Central Bank added a net of 65 billion Yuan through reverse repos; however, Yuan funding costs from overnight to 1 year in Shanghai interbank market continued to climb up. In specific, 1-month and 3-month SHIBOR hit the highest levels since July 2015; 1-month SHIBOR has increased for 28 trading days in a row and 3-month SHIBOR rose for 43 consecutive trading days.
While the onshore tightening is mostly resulted from increasing demand in liquidity, the offshore uneased condition is more likely led by intended cuts in supply. The overnight HIBOR remained at 10.00%, which makes it relatively expensive to short the Yuan.
Market News
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.
- Chinese top policymakers have set strategies for the economy in 2017 at the annual Central Economic Work Conference held last week. Here are the highlights and analysis:
- Maintaining stability while seeking progress will be the main theme for 2017. Stability is the prerequisite for reforms.
China’s economic growth has slowed down to 6.7% in the first to third quarter in 2016. It is expected to drop further to 6.5% in 2017 according to a report released by the Chinese Academy of Social Sciences, a leading Chinese think tank, on December 19th. Within such context, maintaining stability in the economy as well as in financial markets has been set as the country’s top priority among all.
- The fundamental issue that China faces is a severe structural imbalance. Supply-side reforms, as the solution, aim to improve the quality of supply and eventually meet demand.
Chinese policymakers see supply-side reforms to be inevitable when solving this fundamental issue and will continue to implement reforms despite of short-term pains brought by them.
A good example for balancing stability and reforms is the recent regulators’ move on the coal market. Coal producers have been required to cut excessive capacity since the beginning of 2016. As it approach to winter, coal prices began to soar in October amid concerns and speculation on insufficient supply of utilities. On one hand, the National Development and Reform Commission (NDRC) worked with coal producers and commodities exchanges in the effort to maintain short-term stability in supply and price. On the other hand, the regulator reiterated that coal producers will still need to reduce low-quality supply in a longer term.
- Adopting a more proactive fiscal policy while keeping the prudent monetary policy.
We may see more fiscal measures designated to support the economy over the following periods, such as increased fiscal budgets, additional tax cuts as well as government-led projects; monetary policy may be used more to deal with the liquidity dilemma.
- Increasing the priority of preventing financial risks. Curbing asset price bubbles.
More tightened rules on financial markets are likely to be introduced from top regulators, including the PBOC, CSRC, CBRC and CIRC.
- Properties are for residential or commercial use, not for speculation.
The Conference emphasized on the real estate sector in specific, restricting loans to be issued to speculators in the housing market. China’s Central Bank will likely continue to work with local governments and commercial banks to strengthen oversight on home loans.
- A top priority is set to reduce corporate leverage.
Debt-to-equity swap has been introduced as a major solution; private companies are also encouraged to use other market-driven approaches to reduce their high leverage.
China Finance Information: a finance online media administrated by Xinhua Agency.
- The PBOC will include off-balance sheet wealth management products (WMPs) into its Macro Prudential Assessment, a system to evaluate banks’ risks, beginning in 1Q 2017. This measure was first mentioned in October, as a move of the Central Bank to strengthen oversight on commercial banks.
https://www.dailyfx.com/forex/fundamental/daily_briefing/daily_pieces/china_news/2016/12/19/Chinas-Market-News-Top-Priorities-for-the-Economy-in-2017.html?utm_source=AWeber&utm_medium=Mu&utm_campaign=em
Today at 12:45 pm by wciappetta
» To address the dollar exchange rate... Mazhar Muhammad explains the risks of floating the Iraqi dina
Today at 10:01 am by Proven
» utube MM&C 4/26/24 Iraqi Dinar - US Treasury Exchange Rates- Focus - Banking Partnerships - Rate C
Today at 8:46 am by Rocky
» utube MM&C 4/28/24 Iraq Dinar - IQD - Banks - Merge Regionally - Water - Labor -Jobs - Dinar Value
Today at 8:45 am by Rocky
» Al-Sudani: The water situation in Iraq is not in the best condition.. Aboul Gheit extends an invitat
Today at 8:34 am by Rocky
» The Sudanese advisor explains... Has the 2024 budget entered into force?
Today at 8:23 am by Rocky
» The Iraqi Central Bank announces the strengthening of banks’ external accounts by $260 million
Today at 8:21 am by Rocky
» Economist: The path of development is the first gateway to sustainable economic advancement in Iraq
Today at 8:20 am by Rocky
» The green economy and diversity... major projects and challenges that will reap their fruits later -
Today at 8:16 am by Rocky
» Behind the scenes of the state administration meeting: The regional government supports Sudanese wit
Today at 8:14 am by Rocky
» The Real Estate Registry begins activating the electronic restrictions management system program
Today at 8:11 am by Rocky
» Al-Sudani confirms from Riyadh the possibility of cooperation with the German technology company (SA
Today at 8:08 am by Rocky
» On top of which is the path of development.. Al-Awadi announces the most prominent files that the Pr
Today at 7:54 am by Rocky
» The President of the Republic receives the President of the International Labor Organization
Today at 7:49 am by Rocky
» Parliamentary Finance: This week will witness funding the salaries of employees in the Kurdistan Reg
Today at 7:48 am by Rocky
» On an experimental basis... Justice announces the start of activating the electronic barriers manage
Today at 7:46 am by Rocky
» Obelisk Hour: The economic provisions in the strategic framework agreement need to be activated
Today at 7:44 am by Rocky
» Before self-sufficiency... 80 percent of citizens' need for gasoline will be met soon
Today at 7:41 am by Rocky
» A deputy reveals the features of the "five-year plan" to revive Iraqi agriculture
Today at 7:39 am by Rocky
» Deputy: We opened the Council of Ministers to decide the salary scale
Today at 7:38 am by Rocky
» Iraq doubles its investments in modern irrigation engineering by no less than 20%
Today at 7:36 am by Rocky
» Confirming to Shafaq News... The Sudanese arrives in Saudi Arabia to participate in the World Econom
Today at 7:31 am by Rocky
» Al-Sudani announces that clues have been found leading to those involved in the Kormor bombing
Today at 7:29 am by Rocky
» Special: Deconstructing the mystery of the repeated targeting of the Kormor field
Today at 7:28 am by Rocky
» Increase in foreign remittance sales at the Central Bank of Iraq
Today at 7:27 am by Rocky
» Al-Maliki: The salaries of the region’s employees are continuing, and there will be solutions to del
Today at 7:26 am by Rocky
» Minister of Resources: Iraq is one of the countries most affected by climate change
Today at 6:29 am by Rocky
» Al-Sudani arrives in Riyadh to participate in the World Economic Forum
Today at 6:27 am by Rocky
» An Arab call to the countries neighboring Iraq regarding the share of water
Today at 6:26 am by Rocky
» IMF: Poor productivity is responsible for 50% of the decline in economic growth
Today at 6:20 am by Rocky
» The President of the Republic stresses to Barzani the importance of focusing on construction, recons
Today at 6:19 am by Rocky
» Will Iran lose the Iraqi market? 20 million dollars is threatened with loss
Today at 6:18 am by Rocky
» Parliamentary Economy: Parliament will extend the legislative term to approve the budget
Today at 6:13 am by Rocky
» A factory for producing electric cars
Today at 6:12 am by Rocky
» Prime Minister: We have launched strategies to improve the conditions of workers
Today at 6:10 am by Rocky
» Economic prospects from America to Türkiye
Today at 6:09 am by Rocky
» Al-Rayes: The path of development is the first gateway to sustainable economic advancement
Today at 6:08 am by Rocky
» Days after announcing the connection with Jordan, an almost complete absence of electricity in Ramad
Today at 6:06 am by Rocky
» A Kurdistan delegation meets with the Ministry of Finance in Baghdad to discuss “revenues and implem
Today at 6:05 am by Rocky
» Parliamentary Economy reviews files and the importance of Sudanese’s upcoming visit to Saudi Arabia
Today at 5:59 am by Rocky
» Al-Maliki talks about postponing the Kurdistan Parliament elections and says that salary transfers w
Today at 5:54 am by Rocky
» The President of the Republic and Barzani discuss the results of Sudanese’s visit to the United Stat
Today at 5:53 am by Rocky
» The Ministry of Finance is "dizzy"... An expert points out a "lapse" in the budget schedules: Februa
Today at 5:49 am by Rocky
» Sudanese Advisor: The 2024 budget has entered into force... and there is no need to send its schedul
Today at 5:43 am by Rocky
» The Iraqi dinar is recovering against the US dollar in local markets
Today at 5:42 am by Rocky
» Iraq.. The claim that OPEC’s decisions affect oil derivatives only and not crude is “inaccurate”
Today at 5:39 am by Rocky
» Al-Bawi: Erdogan failed in his promises to his people and seeks to plunge Iraq into its conflict wit
Today at 5:37 am by Rocky
» The Sudanese and his battle against corruption.. Where is the fault with the government or with the
Today at 5:36 am by Rocky
» Amnesty International criticizes Iraq's implementation of 13 death sentences
Today at 5:34 am by Rocky
» The ambassador is very angry with Parliament: The homosexuality law obstructs the government and har
Today at 5:33 am by Rocky
» Al-Mandalawi: There is no place for homosexuality in the Iraq of the prophets and saints, and that i
Today at 5:32 am by Rocky
» Al-Sudani receives the President of the University: Towards the strength and status of the Arab syst
Today at 5:31 am by Rocky
» Ayed Al-Hilali: All leaders are discussing “the finer details of Sudanese” tonight, and Barzani join
Today at 5:30 am by Rocky
» He announced the reception of offers from three alliances from international companies for the Baghd
Today at 5:28 am by Rocky
» During his meeting with the head of the Iraqi Journalists Syndicate... Al-Amiri stresses the importa
Today at 5:26 am by Rocky
» During the launch of the Arab Labor Conference in its 50th session in Baghdad... Al-Sudani: We launc
Today at 5:24 am by Rocky
» Saudi Arabia announces an increase in direct flights with Iraq
Today at 5:23 am by Rocky
» Resources: Government measures have contributed to improving the water situation in Iraq
Today at 5:22 am by Rocky
» Al-Sadr: The voice of American universities calling for an end to Zionist terrorism is our voice
Today at 5:21 am by Rocky
» International organization: 50% of displaced Iraqis lack official documents
Today at 5:20 am by Rocky
» Al-Sudani: The path of development will provide many job opportunities
Today at 5:19 am by Rocky
» Parliament Finance: The necessity of converting tax and customs revenues to digital processing
Today at 5:18 am by Rocky
» Al-Sudani announces that clues have been found to uncover those involved in the Kormor bombing
Today at 5:16 am by Rocky
» The start of the work of the Fourth Baghdad International Water Conference
Today at 5:09 am by Rocky
» The Council of Ministers will suspend official working hours next Wednesday
Today at 5:07 am by Rocky
» An almost complete outage of water and electricity in western Anbar
Today at 5:06 am by Rocky
» Parliamentary expectations of extending the legislative term to approve the budget
Today at 5:00 am by Rocky
» Education: The cost of participating in the electronic school will amount to 200 thousand dinars
Today at 4:59 am by Rocky
» Al-Sudani arrives in Riyadh to participate in the World Economic Forum
Today at 4:58 am by Rocky
» A newspaper reveals a dark world that brings together bloggers and politicians
Today at 4:57 am by Rocky
» Al-Marsoumi: The bombing of the Kormor field undermined efforts to achieve self-sufficiency in gas
Today at 4:55 am by Rocky
» utube MM&C 4/24/24 Support - USA- Turkey - Timing- Currency Value - Tabled
Yesterday at 3:18 pm by Rocky
» Parliamentary efforts to transform Iraq into a global market for transferring Internet capacities
Yesterday at 3:07 pm by Rocky
» A parliamentary committee that enriches the political forces: Stop plundering Iraq’s wealth and work
Yesterday at 2:56 pm by Rocky
» Politician: Salem Al-Issawi is the most likely to assume the presidency of Parliament
Yesterday at 2:55 pm by Rocky
» Al-Sudani: The world today is witnessing crises whose impact has been reflected in the global econo
Yesterday at 10:50 am by Rocky
» The Federal Court responds to an inquiry by Al-Sudani regarding the powers of the provincial council
Yesterday at 10:40 am by Rocky
» Among them are the Iraqis... a list of the most sought-after immigrants to America
Yesterday at 10:38 am by Rocky
» An expert talks about the "biggest barrier" and the positives of merging Iraqi and Arab banks
Yesterday at 10:29 am by Rocky
» The House of Representatives adjourns its session
Yesterday at 10:24 am by Rocky
» Parliamentary demands to expedite the legislation of the Eid al-Ghadir holiday law (documents)
Yesterday at 10:23 am by Rocky
» Parliament adds the paragraph “Electing the Speaker of the House of Representatives” to its agenda
Yesterday at 10:21 am by Rocky
» Alsumaria publishes the text of the law against prostitution and homosexuality
Yesterday at 10:20 am by Rocky
» A parliamentarian reveals the reason for the failure of the Speaker of Parliament to pass during tod
Yesterday at 10:19 am by Rocky
» Al-Sudani: The government has launched many strategies and initiatives that will improve the reality
Yesterday at 9:42 am by Rocky
» International Business: Iraq has made progress in supporting businesses through investment and priva
Yesterday at 9:33 am by Rocky
» Association of Banks: Iraq is witnessing great development in the transition to electronic governmen
Yesterday at 9:25 am by Rocky
» The House of Representatives votes to add an item to its agenda (election of the Speaker of the Hous
Yesterday at 9:22 am by Rocky
» Parliamentary integrity: Combating corruption requires parliamentary legislation
Yesterday at 9:15 am by Rocky
» Al-Karaawi: America is trying to restrict Iraq
Yesterday at 9:13 am by Rocky
» The State of Law coalition moves to form the local government in Diyala
Yesterday at 9:12 am by Rocky
» The Sudanese and his battle against corruption.. Where is the fault with the government or with the
Yesterday at 9:11 am by Rocky
» Prime Minister's Advisor: We will see the dollar fall on the black market soon
Yesterday at 9:09 am by Rocky
» The Sunni blocs are resolute. The presidency of the Council is ours, away from Al-Halbousi
Yesterday at 9:08 am by Rocky
» Al-Sudani discusses with a workers’ organization his government’s steps in this field
Yesterday at 8:58 am by Rocky
» Parliament holds its session in the presence of 170 deputies
Yesterday at 8:57 am by Rocky
» In the presence of Nechirvan Barzani and Al-Sudani... the State Administration Coalition holds an “i
Yesterday at 8:55 am by Rocky
» The UAE company ADNOC resorts to Iraqi oil. Find out the reasons
Yesterday at 8:53 am by Rocky
» The Iraqi Parliament votes to add an item to elect a president to its agenda
Yesterday at 8:52 am by Rocky