Deutsche Bank-Asia Week Ahead What you need to know 6 - 10May-107993227

DeutscheBankEconomicsDateResearch3May2024AsiaWeekAheadAsiaWhatyouneedtoknow:6-10MayChina:sentimentisturningJulianaLeeGlobalsentimentappearstobeturningonChina.Afterreportingstronger-than-ChiefEconomistexpectedQ1GDPgrowth,ChinaandHongKong'sstockmarketshaveralliedover+65-6423-5203thepast2weeks,andtheHangSangwasthesecond-bestperformingmajorassetclassgloballyinApril,secondtocopper.TheCNHhasalsostrengthenedagainsttheKaushikDasdollarthisweek,whilelong-endCGByieldshaverisensharply,endingarallythatChiefEconomiststartedinDec2023.+91-22-71804909SentimentlikelyreceivedanotherboostfromthereassuringpolicymessagesattheYiXiong,Ph.D.PolitburomeetingonTuesday.China'stoppolicy-makersdidnotshowanyChiefEconomistcomplacencyandarecommittedtomorepolicymeasurestosupportastill-fragile+852-22036139recovery.Mostnotably,there'sashiftinpropertysectorpolicy,wherereducinginventoryhasbecomeanewfocus.AkeyquestioniswhetherPBOCwillutilisetheDeyunOuPSLfacility(orcreateanotherlendingfacility)toprovidefinancingforinventory-ResearchAssociatereductioninitiatives.Thepolitburoalsourgedthegovernmenttofront-loadbondissuances,includingCNY1trofspecialCGB,toacceleratefiscalspending,andaskedthePBOCtouseitsinterestrateandRRRpolicytoolsflexibly.ItwasrareforthepolitburotomakeexplicitreferencestothespecificpolicytoolsofthePBOC.WemaintainourforecastthatthePBOCwi...