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Following Monday's State Council meeting which appeared to signal China entering a new easing phase...
As Bloomberg notes, greater fiscal spending and softer regulatory measures are now being added to looser monetary conditions. Key takeaways from Monday's statement:
Demand - Importance - Spending - Number - Projects
Domestic demand is being elevated in importance. Fiscal spending will be accelerated, with a number of new projects to be rolled out. Boosting domestic demand was placed ahead of economic restructuring in the statement, unlike in April when it appeared only as a supplementary policy to restructuring.
Policy makers appear to be giving up on some of the targets of the deleveraging campaign. The State Council has asked the PBOC and MOF to meet "reasonable" financing needs from local financing platforms, in another step of loosening regulatory control, after allowing public funds to buy some substandard credit assets last week.
PBOC - Liquidity - Operations - Tonight - Fix
But, PBOC has decided to skip liquidity operations tonight and lower the Yuan Fix.
Offshore Yuan broke 6.84/USD for the first time since...
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