This bombshell from China yesterday:
- China's government is considering buying unsold homes to ease oversupply
- AUD/USD gaining further on news out of China of a plan to buy millions of unsold homes
More:
Note that the news out of China was a 'plan'. It hasn't been confirmed.
Via Nomura:
- It's been our view that Beijing will eventually have to address concerns about homes being delivered
- Beijing should reach into its own pockets, even with printed money from the People's Bank of China, to support the completion of new homes that were pre-sold by developers
- expects that eventually Beijing will set up a special agency and set aside a special fund for such a rescue
Comments via CBA on what we have so far:
- reports have not been confirmed so it is unclear if the purchases will go ahead
AUD/USD and NZD/USD received a boost from the stronger CNH
And, coming up on Friday, China activity data:
- We expect the Chinese activity data to show a continued recovery led by industrial production and public investment, supporting CNH
