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26 Jun 2013
Flash: PBOC creates waves and volatility – Deutsche Bank
FXstreet.com (New York) - “On balance the PBOC is edging out the Fed as the main concern for markets at the moment – it’s also providing us with pretty volatile intra-day markets.” suggests Macro Strategy Analysts J. Reid and C. Tan at Deutsche Bank.
Indeed, as we went to press with the EMR yesterday, the Shanghai Composite index was trading at a low of -5.5% before staging an impressive come back to finish the day relatively unchanged (-0.2%) on the back of some somewhat reassuring comments from PBOC officials. The PBOC's comments mostly downplayed the concerns around liquidity and money market rates saying that liquidity was partly a seasonal factor.
A number of domestic newswires have also run editorials overnight suggesting that liquidity will return to the banking sector after month-end. “Looking out to the rest of this week, it's very likely that we'll see more headlines from PBOC officials with Shanghai's annual Lujiazui Forum (a financial conference) starting tomorrow and continuing through until Saturday.” warns the analysts. This forum is co-sponsored by the PBoC, the local banking, securities and insurance regulators.
Indeed, as we went to press with the EMR yesterday, the Shanghai Composite index was trading at a low of -5.5% before staging an impressive come back to finish the day relatively unchanged (-0.2%) on the back of some somewhat reassuring comments from PBOC officials. The PBOC's comments mostly downplayed the concerns around liquidity and money market rates saying that liquidity was partly a seasonal factor.
A number of domestic newswires have also run editorials overnight suggesting that liquidity will return to the banking sector after month-end. “Looking out to the rest of this week, it's very likely that we'll see more headlines from PBOC officials with Shanghai's annual Lujiazui Forum (a financial conference) starting tomorrow and continuing through until Saturday.” warns the analysts. This forum is co-sponsored by the PBoC, the local banking, securities and insurance regulators.