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06 Feb 2024

Risk Sentiment Thaws on Chinese Recovery Efforts

Risk-sensitive assets are seeing a modest sentiment boost this morning as Chinese authorities move to stem the bleeding in stock markets, with top officials reportedly preparing to brief President Xi Jinping on their efforts. Onshore share indices moved higher overnight after the government imposed new restrictions on short-sellers, the state-owned Central Huijin Investment Ltd. said it would add more exchange-traded funds to its holdings, and the China Securities Regulatory Commission pledged “greater efforts” in encouraging buying from institutional investors. US equity futures are setting up for a stronger open, ten-year Treasury yields are inching lower after a circa-28 basis point...

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RBA: A more balanced approach

At its first meeting of 2024, and the first under the new ~6-weekly structure which also saw the bank release its latest economic projections, the RBA kept the cash rate steady at 4.35%. This was expected with more attention on the RBA’s updated reading of the macro landscape and its policy guidance. In the end the RBA played a rather straight bat by continuing to stress that “returning inflation to target within a reasonable timeframe remains the Board’s highest priority” and noting that “while recent data indicate that inflation is easing, it remains high”. With that in mind, in the...

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