Iron ore futures popped yesterday on the thinnest of reasons. As previously noted, steel mills are short of raw material inventory so we could see short-term restocking on newsflow.
Goldman has more on the outbreak of happiness:
In its Q1 monetary policy report, the PBOC reiterated its accommodative stance by stating that monetary policy would be “precise and forceful” (consistent with the Q1 MPC minutes released earlier and Q4 2022 report) to facilitate economic growth. In addition, in its Q1 report, PBOC pledged to keep monetary and credit aggregates at a reasonable total amount, and keep credit growth at a stable pace. “Reasonable total amount” is new compared with the Q1 MPC minutes released in April. In light of the sharp deceleration of April credit growth, this statement suggests PBOC might want to manage the pace of credit growth deceleration (TSF month-over-month annualized growth was 5.1% in April, vs 14.4% in March), which potentially opens the door to another RRR cut, in our view. We expect a 25bp broad RRR cut in June when liquidity demand picks up at quarter-end to boost market sentiment and facilitate overall credit growth.
