[SMM Steel Morning News] expectations of monetary policy easing are rekindled

Wednesday, 27 May 2020

News breakfast

"rising factors

1. The central bank's 10 billion yuan reverse repurchase operation makes loose expectations rekindle institutions: the future reserve cut is a high probability event.

The central bank conducted a seven-day reverse repurchase operation of 10 billion yuan yesterday. 55 days later, the central bank resumed the reverse repurchase operation. Although the scale of this release is only 10 billion, it is a drop in the bucket to ease the current shortage of funds, but its signal significance is greater than the substance. Its positive effect is to rekindle loose expectations and stabilize market confidence. Institutions expect that the future reserve rate cut is a high probability event, OMO, MLF interest rate reduction is also entirely possible. There will be two MLF maturities in June, 500 billion yuan on June 6 and 240 billion yuan on June 19. After the LPR did not cut interest rates on May 20, the necessity for the central bank to guide the MLF interest rate downward has increased, and the MLF interest rate is expected to be adjusted in June.

Downside factor

1. Bancassurance Regulatory Commission: firmly implement the requirement of "no speculation in housing"; personal housing loans declined in the first quarter.

Bancassurance Regulatory Commission: firmly implement the requirement of "no speculation in housing" and continue to curb the real estate financial bubble; personal housing loans increased by about 1 trillion yuan in the first quarter, down 2.4% from the same period last year.

Hot news

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