In today’s briefing:
- PBOC’s Surprise Rate Cuts on 22 July 2024
- New Changes in the IPO Bookbuilding and Valuation Process Disclosure Policies in Korea
- Portfolio Watch: Markets discarding Q2 data due to Dudley?
- U.S. June Personal Income and Spending – Core PCE Prices Lower, Income Underperforming Spending
PBOC’s Surprise Rate Cuts on 22 July 2024
- By surprises on Monday, China cut the one-year Loan Prime Rate by 10 basis points to 3.35%, while the five-year LPR was reduced by the same margin to 3.85%.
- Afterwards PBOC cuts its Medium Term Facility (MLF) on Thursday to 2.30%, down 20 basis points from its previous MLF loan, its largest cut since April 2020.
- The rate cuts this time carries more information than previous cuts as in the past, MLF changes usually precede rather than follow the LPR cuts.
New Changes in the IPO Bookbuilding and Valuation Process Disclosure Policies in Korea
- Starting 1 August, there will be several significant changes to the IPO book building and lockup results disclosure polices in Korea.
- When conducting the comps analysis for IPOs, if there are competing companies that are excluded, then the companies need to provide more detailed reasons as to why they are excluded.
- The new, stringent IPO rules are likely to bring about a greater scrutiny on the IPO valuations of newly listed companies in Korea.
Portfolio Watch: Markets discarding Q2 data due to Dudley?
- Welcome to the weekly Positioning Watch, where we assess the past week’s performance of our portfolio.
- We have generally navigated a tricky week well, thanks to material gains from our metals shorts.
- However, we are admittedly a bit surprised by the lack of response in the rates space to what appears to be a still-resilient US economy.
U.S. June Personal Income and Spending – Core PCE Prices Lower, Income Underperforming Spending
- US June’s personal income and spending came in little surprise. Q2 income surprised on the downside but spending and PCE prices surprised on the upside.
- June’s core PCE price index rose by 0.2% which is in line with expectations and treaded lower, but still stronger than the June core CPI at 0.1%.
- May core PCE prices remain at 0.1% underperforming a 0.2% May core CPI but the firmer were revised up to 0.13% from 0.08%.
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