Nomura analysts are wary of the jump in positive sentiment following the recently announced supportive measures for the Chinese property sector, including plans to buy back unsold homes:
They outline concerns that:
- it may take several months for Beijing to lay the groundwork to significantly support the property sector, investors may well lose patience
- even if local positive sentiment persists and a softer USD emerges in the near term, state banks and local corporates could still accumulate USD, which would limit any potential downside in USD/yuan (related: China’s capital outflow surges to its highest since 2016)
- simmering U.S.-China trade tensions, which could well heat up ahead of the U.S. election
CNH is offshore yuan.
