Case for rate cuts fades as financial stability concerns return

Much of the focus in the coming days will be on the senior government appointments that will be confirmed at the National People’s Congress that starts in just over a week, including for the PBOC.  We now think the new leadership there is unlikely to see a case for further rate cuts as the economy appears already to be recovering well and new financial stability concerns have emerged linked to the pre-payment of mortgages.

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