In today’s briefing:
- China Housing – Demand-Supply Fundamentals Part #2: The “Demographic Twist”
- Bullish or Bearish? Our Thoughts on the Fed’s Hawkish Pause
- ECB Watch: 6 Charts on How EUR QT Impacts Markets
- CX Daily: How China Is Tightening Controls Over Cross-Border Data Transfers
- Central Banks Raising the Roof
China Housing – Demand-Supply Fundamentals Part #2: The “Demographic Twist”
- The common narrative today is how the deteriorating demographics in China will have a negative impact on the housing demand
- The official aggregate figures indicate the same with the population aging, birth, and marriage data
- The twist to this narrative is that in the near term, the situation for the non-rural population growth looks quite different from the overall figures
Bullish or Bearish? Our Thoughts on the Fed’s Hawkish Pause
- We believe the most recent FOMC decisions and forward guidance on US monetary policy should be interpreted as ‘hawkish.’
- Bullish case: Why ‘skip’ with just 4 meetings remaining, inflation down to 3.5% leaves monetary policy very tight, and the Fed didn’t hike in 2006 after a 425 bps increase.
- Bearish case: Dec 2024 Fed Fund future at 3.85%, rates are (very) restrictive in any case, this is no environment for growth stocks, look what happened after 2006.
ECB Watch: 6 Charts on How EUR QT Impacts Markets
- With EUR QT now increasing in speed we look at the ramifications
- EUR liquidity matters for EUR markets and FX/Rates in particular
- QT and TLTROs will now lead to declining liquidity in EUR
CX Daily: How China Is Tightening Controls Over Cross-Border Data Transfers
- Data /: In Depth: How China is tightening controls over cross-border data transfers
- China-U.S. /: Blinken heads to China on mission to stabilize ties
- Saudi Arabia /: Saudi Arabia wants more Chinese investment
Central Banks Raising the Roof
- The ECB unsurprisingly raised its policy rates by 25bps again in June. It still sees more ground to cover, with another hike signalled for July, absent material change.
- President Lagarde resisted guidance beyond that and did not pointedly over-emphasise the plural like in May. We see upside risks to decisions beyond July’s 25bp hike.
- Those upside risks and the Fed’s indicated hikes mean we now forecast a September BoE hike. The MPC is unlikely to support as much extra relative tightening as priced.
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