5 in 5 with ANZ
5 in 5 with ANZ
Tuesday: China surprises by holding key rate
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Tuesday: China surprises by holding key rate

PBoC holds MLF at 2.5%, surprising markets expecting a cut; Raymond Yeung sees eventual cut & lower RRR ahead of New Year cash demand; Adelaide Timbrell on commercial property trends

The People’s Bank of China left a key interest rate on hold, surprising markets expecting a cut after more signs China’s economy is generating deflation. Japanese stocks hit a 34-year high on a weak yen and lower bond yields.

In part two of our bonus deep-dive interview on Australia’s commercial property investment pipeline, ANZ Senior Economist Adelaide Timbrell details the overall cyclical and structural drivers.

5 things to know

  1. The Nikkei rose 1% to a fresh 34-year high over 35,000, thanks to a weak yen and lower Japanese bond yields, says ANZ’s Head of FX Research Mahjabeen Zaman.

  2. Chinese stocks fell 0.1% to their lowest levels since 2019 after the Peoples Bank of China surprised markets by not cutting a key bank lending rate. ANZ’s Chief Economist for Greater China Raymond Yeung sees an eventual cut.

  3. Raymond sees the PBoC also cutting the Reserve Requirement Ratio (RRR) for banks before the Chinese New Year (Feb 10) surge in demand for cash.

  4. Chinese markets are more focused on TSMC’s market update on Thursday than the weekend election result in Taiwan, says Raymond.

  5. The ANZ Indeed job ads series showed a 0.1% rise in December, which is unlikely to shift the RBA’s view of holding its cash rate for now, says ANZ Australia Senior Economist Catherine Birch.

Cheers

Bernard

PS: Look out tomorrow for a review of NZ business confidence results due today and previews of China GDP and US retail sales data tomorrow night.

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5 in 5 with ANZ
5 in 5 with ANZ
A daily podcast hosted by Bernard Hickey that gives you the five things you need to know about the global economy and markets in under five minutes. Plus a deep dive into emerging trends and issues featuring ANZ's global team of experts.