Were there signs China was going to cut?

What can we learn from Friday's surprise

Were there signs that China was going to cut rates on Friday? Most central banks offer some kind of signal that an interest rate move is imminent.

If they did this time, the signals weren't obvious. No one that I know of was predicting an imminent cut. It wasn't a total surprise because China has been cutting every 2-3 months since last November.

The day before the cut, I mentioned this:

"The PBOC has been cutting rates throughout the last year in roughly 3-month intervals. That brings a cut back into play in mid-November."

That's a bit of a hint, but also consider the headline of the post. It was: PBOC top economist expects stable growth over next quarters. That's not exactly a sign of panic.

Other recent news was GDP that was better than expected at 6.9% and a similar story in home price data.

Looking through other headlines, it's still difficult to figure out why China cut. One that maybe should have set off alarmbells was only a few hours ahead of the move when a PBOC researcher highlighted the risks of deflation. An equal mystery is why they did it on Friday rather than the usual Saturday moves.

In any case, it's best to move forward now as the debate rages on the two ways to see the Chinese rate cut.