Daily Brief Macro: China’s Economic Plan and Investors’ Epiphany and more

• China has shifted sentiment in its stock markets which will translate into a virtuous cycle of increased wealth and consumption.
• China is now focusing on demand side monetary policies after nearly 2 years of supply side policies.
• China’s large household savings pool will now move into the real economy and help the country in its transition to increased domestic consumption as investment evolves into “High Quality Manufacturing”

• Macro backdrop evolving with upcoming US elections and Middle East tensions impacting EM assets
• Mixed bag on macro side with softer inflation in EM, better revisions in US growth but soft manufacturing PMIs
• China as tiebreaker with further policy support, rally in equities, and implications for Fed and commodities prices; geopolitical risks and US election as wild cards to watch

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• Welcome to this liquidity watch analysis, where we will address the current stress in USD funding markets and the potential impact on the Fed’s reaction function.
• Our best guess is that the current situation will serve as a reason for the Fed to alter the liquidity path significantly in the coming months.
• Here is a list of the key details you need to pay attention to.

• Joins hands with Bosch to develop intelligent tire tech for safe driving
• Gets validation from SBTi on zero emission target by 2040
• Gets over 500 approvals for cutting-edge Elect technology

• Powell resisted further cuts of 50bp, contrasting with Bailey’s willingness to take more aggressive action. This was in the context of low EA inflation, which was in line with our predictions, and the realization of significant payroll risk. Policy pricing adjustments continued.
• The focus for the upcoming week is on US inflation and the Fed minutes, along with some secondary monetary policy announcements.
• The most notable consensus is a 50bp cut by the RBNZ. Other key policy decisions are expected from Peru, Korea, Israel, and India.