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China eases, but does it stimulate?

| Posted by: Paul Donovan | Tags: Paul Donovan

  • China has cut its reserve requirement ratio for banks, which is being interpreted as a stimulus. In actual fact, the measure likely just replaces liquidity lost from reduced foreign exchange market operations, though it comes in the wake of a series of other policy stimulus measures.
  • Noise in the Euro area over the Greek situation continues to hum away in the background - the IMF's Lagarde says she is losing patience (economists lost patience with the political posturing some time ago). There does, however, seem to be more recognition of potential contagion risks.
  • The US has durable goods data, and new home sales. Both, for different reasons of course, are expected to moderate a little. Durable goods have had some moderation signalled in the sentiment measures, and new home sales have been running ahead of mortgage applications of late.