Bankinter : The People’s Bank of China (PBoC) lowers the 1-year funding rate to 2.65% from 2.75% previously (in line with estimates); (ii) Industrial Production +3.5% in May (year-on-year) vs. +3.5% estimated and +5.6% previously; (iii) Retail Sales +12.7% in May (year-on-year) vs. +13.7% estimated and +18.4% previously.
Bankinter’s analysis:
The PBOC sticks to the script and lowers one-year rates after doing the same on Tuesday with the REPO rate. It will most likely replicate the move next week with the 5-year benchmark rate, currently at 4.30%. This is good news as it will help boost China’s economic recovery after the passage of COVID which, as Industrial Production and Retail Sales show, seems to be losing some momentum. Both Hang Seng and CSI300 are up today c.+1.3%.
