If one believes in a slowdown — domestic demand is weak and the central bank is cutting rates — the policy action “is just managing the pace of long-term yield decline rather than reversing” it
GS forecast is based on the view that the Fed’s Sept. rate reduction will open the door for China's action
Sees risk of deflationary, stagflationary mindset becoming entrenched.
Sees some improvement...

Huajin Securities noted that the PBOC's Q2 monetary policy implementation report indicates that a new monetary policy framework is emerging. In the context of high risks of a rebound in the U.S. dollar index and a cooling demand for debt financing due to China’s economic transition, stabilizing interest rates is key to stabilizing exchange rates, and deleveraging is essential to prevent the e...

Everbright Securities pointed out that core CPI remains weak, and PPI continues to bottom out.
Huachuang Securities noted three hidden pressures on demand based on July’s price data. This year: 1) Property income growth has declined rapidly, potentially dragging down discretionary consumption significantly. 2) The month-on-month rise in dining-out prices was weaker than ...

Gradual recovery in consumption and the rainy season help turn the CPI m/m to positive.
The core CPI rose by 0.3% y/y, from -0.1%.
Food prices rose by 1.2% y/y, from -0.6%.
Vegetables and eggs rose by 9.3% and 4.4% y/y, due to bad weather.
Pork prices rise by 20.4% y/y, vs +2.3 PPS vs June.
For y/y price changes
Food, tobacco & liquor +0.2%
Clothing +1.7%
Accomodation +0.1%
Necessities & services +0.7%
Transportation & Communication -0.6%
Education, Culture & Entertainment ...

Galaxy Securities believes that export concerns are emerging, and growth-stabilizing policies need to be strengthened.
With consumer spending remaining sluggish in the first half of the year and real estate investment continuing to bottom out, foreign trade's contribution to the economy has become increasingly prominent. If export growth slows down in the future, policies will need to be further strengthened to meet the annual economic growth target, and new policies and tools may be directed t...

In 1994, China adjusted the tax distribution system and tax structure between the central and local governments. In 2013, China began allowing local governments to issue local bonds. And this year, more fiscal revenue will be transferred from the central to local governments. For example, the collection of the consumption tax will be moved downstream and stably allocated to local governments.
The key points of the core d...

The spillover is reducing US and Euro area core inflation by about 0.1pp as it lowers core goods inflation by around 0.5pp, on MS estimates.
While the overall effects are modest, China should give the Fed and the ECB more room to cut this year.
Falling goods prices have micro implications, most significantly for the US apparel sector.
With China's deflationary impulse, MS estimates that the apparel component of US CPI declines by 0.3pp...