Medium Lending Facility News Today

Following the airstrike launched by the US and UK against Houthi rebel target in Yemen overnight (see more below), geopolitics will be on top of the agenda.

Today is a light day on the international data front, but we get a lot of Nordic data.

Today is a light day on the international data front, but we get a lot of Nordic data. In Denmark, we get CPI inflation for December 2023. We expect to see that inflation has continued to climb higher to 1.1% y/y, due to base effects from December 2022's decline in fuel and electricity prices. We expect the underlying price pressure to remain low, as it has for the last 3-4 months.

Cautionary tone by Fed speakers. On Friday, some FOMC participants cautioned against declaring victory over inflation despite the recent positive signals. Collins (non-voter) noted that she has seen less progress on non-shelter services inflation and that additional rate hikes cannot yet be taken off the table. Goolsbee (voter) underscored that taming inflation remains the Fed's key focus over growth or the labour market. Daly (non-voter) emphasized that the Fed 'needs patience' a...

PBoC stays put on rates – but banks may cut 5Y prime rate The PBoC has kept the 1Y Medium Lending Facility interest rate unchanged at 2.85% since February, even though China experienced a deep economic slowdown in April and May. Unlike most other economies in the region, China is not suffering from high inflation ...

New yuan loans grew only CNY645.4bn in April after a CNY3130bn increase in March. The market consensus was CNY2200bn. April is typically a month of lower loan growth than March, but this April’s loan growth is just too weak. This matches the very soft growth in aggregate finance, which grew only CNY910.2bn in April compared ...

China’s zero-Covid policy bares its fangs China will release retail sales, industrial production and fixed asset investment data on Monday. The focus will be on the degree of contraction in the retail sales figures, as well as the corresponding extent of growth in infrastructure investment to cushion the economy. These two opposing forces may not ...

PBoC’s relief measure is to urge banks to be flexible on lending The PBoC released a statement (in Chinese) to help people and companies affected by Covid. Most of the measures mentioned are window guidance for banks to be flexible in lending to individuals and companies that are affected temporarily by lockdowns and credit issues, ...

Inflation could show early fallout from ongoing Russia-Ukraine conflict In the coming week, inflation data from Korea, Japan and Singapore will be released. Although this data covers February, we could see the initial impact of the ongoing conflict in eastern Europe, which began at the end of last month. Korea producer price index (PPI) and ...

Retail sales rose 6.7%YoY YTD in February, down from 12.5% in December. Industrial production increased 7.5%YoY YTD, down from 9.6% at the end of 2021, and fixed asset investment grew 12.2%YoY YTD, up from 4.9% at the end of last year. Although fixed asset investment grew the fastest of these three measures of activity data, ...