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- Yuan is being fried. As a result of renewed Chinese lockdown fears, sentiment has plummeted to its lowest level in a year.
- China’s yuan finished domestic trading on Monday at a one-year low against the dollar, extending losses after posting its worst week since 2015, as a worsening economic growth outlook drove investor concern that the currency had more room to fall.
- “The PBOC’s lack of intervention despite elevated downside volatility in the CNY may signal that China may be shifting to a more growth-oriented currency management at a time when tight containment measures pose significant risks to the country’s economic outlook,” ING said in a note.
- The German government has raised its inflation forecast for this year to 6.1 percent due to the impact of the Ukraine war, up from 3.3 percent in January, according to a government document seen by Reuters.
- According to the document, Berlin, which is set to release its spring forecasts on Wednesday, expects consumer price growth to slow to 2.8 percent in 2023.
- A Reuters source said on Friday that Berlin was planning to lower its growth forecast for Europe’s largest economy for 2022 to 2.2 percent from 3.6 percent, with growth picking up slightly to 2.5 percent in 2023.
- Stagflation appears to be relevant.
- China’s cabinet will continue to promote the release of consumption potential and long-term consumption recovery. Will direct the financial system to support the real economy through various measures such as interest rate reductions and fee reductions.
- Mass consumption, such as automobiles, will steadily rise. No new automobile purchase restrictions shall be imposed in any region.
- Regions with automobile purchase restrictions will gradually increase the number of automobile increment quotas and relax qualification requirements for car buyers.
- Will use existing financial resources to support the construction of consumption-related infrastructure. Will include eligible projects in the scope of local government special bonds, allowing investment to be better used to stimulate consumption.
- With China appearing to revert to lockdown, you have to believe that government support measures will only become more pronounced.