This may have got lost in the mix:
- China sets 1 and 5 year LPR rates unchanged, as expected
- one-year loan prime rate was unchanged at 3.45%
- the five-year rate was unchanged at 3.95%
All as expected.
There are some thoughts, well founded, that the People's Bank of China is still likely to ease monetary policy further
- more liquidity will be need for China's banks to purchase government bonds, including the issuance of ultralong special Treasury bonds that started last Friday - these bonds are raising cash for economy-building purposes (stimulus)
On Friday we did have a rate cut from the PBoC:
- aimed at addressing China's prolonged property-sector downturn
Other effort will involve local governments buy back unsold homes, lowering down payments for would-be home buyers, and removing the floor on mortgage rates that banks offer clients.
