China’s bond unbubble

Friday 26 July 2024

Goldman wraps yesterday’s rate cut.

The PBOC cut the 1-year MLF rate by 20bp with RMB 200bn liquidity injections this morning (July 25th).

In our view, this move is a dovish surprise due to the unusual timing of the MLF loan extension (typically on the 15th of each month) and a larger-than-expected rate cut (vs. the 10bp OMO rate cut on July 22nd).

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About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.