China Injects Most Short-Term Cash Into Banking System on Record - Bloomberg
China pumped the most liquidity into its financial system via short-term monetary tool on record, suggesting policymakers are keen to keep funding costs low to bolster the economy. The People’s Bank of China granted lenders a net 733 billion yuan ($100 billion) of cash with the so-called reverse repurchase contracts on Friday. That came after data released this week flashed signs of a pickup in the economy last month, when consumer spending and industrial production came in stronger-than-expected. Lenders keep one- and five-year loan prime rate unchanged. Source: Bloomberg
China | PBOC adds net 289 billion yuan via medium-term facility as Debt Sales Surge
The move adds to recent efforts to ensure hitting GDP target - Offers Most Cash Support Since 2020 - Bloomberg China’s central bank is making the biggest medium-term liquidity injection since 2020, stepping up efforts to support the nation’s economic recovery and debt sales. The People’s Bank of China added a net 289 billion yuan ($39.6 billion) into the financial system via a one-year policy loan on Monday, the most since Dec. 2020. At the same time, it drained a net 134 billion yuan of short-term liquidity through open-market operations.
Central banks have continued to load up on the yellow metal
They added 77 tonnes to their gold reserves in August. Net buying is closing in on recent "highs". Gold is trading without much trend, but we are at very big levels. Source: Variant perception, TME
The worst weekly performance since March for the sp500...
Markets like clarity and hate confusion. The first half of the year was about disinflation + AI buzz. Now the markets are not sure about what's next. And some of the confusion seems to be coming from central banks... This week we got a very confusing message from the #fed: a pause in rates, higher dot plots in 2024 but also calling a soft landing NOT a base line expectation, hence sharing fears that keeping real rates for a long period of time creates some downside risks for the economy and the markets... The combo higher inflation risk + downside growth risk is not a great value proposal for Mr Market at the time you can nicely paid by keeping your assets in money markets funds... Source chart: Bloomberg
Turkey CenBank raised main interest rate to 30% from 25%, but w/inflation at ~60%, real rates are still very heavily negative
The hike continues what many see as a return to more orthodox monetary policy under Governor Hafize Gaye Erkan, a former executive of First Republic Bank & Goldman Sachs, who was appointed in June after President Recep Tayyip Erdogan won a close-fought re-election. Erkan now hiked rates by a cumulative 2150bps. Source: Bloomberg, HolgerZ
SNB unexpectedly leaves policy rate unchanged at 1.75%.
The Swiss national bank unexpectedly leaves its policy rate unchanged at 1.75%. Market was estimating the probability of a 25bps hike at more than 70% yesterday.
USDCHF broke the 200 daily moving average of 0.9036 and now trading higher over 0.9060.
EURCHF also trading higher at 0.9650.
FED leaves rates unchanged, signals one more hike this year
The Federal Reserve left its benchmark interest rate unchanged while signaling one more hike this year. FOMC repeated language saying officials will determine the “extent of additional policy firming that may be appropriate.” The FOMC held its target range for the federal funds rate at 5.25% to 5.5%, while projections showed 12 of 19 officials favored another rate hike in 2023.
Central banks meetings calendar
Source: Bloomberg
