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Fewer rate cuts but fiscal easing won’t come to the rescue

China's central bank left the loan prime rates on hold today. With higher oil prices set to keep the economy out of deflationary territory, we're now only expecting the central bank to deliver one 10bp rate cut this year. Higher energy prices will drag on activity, but we're not expecting the finance ministry to be dislodged from its intention of offering only tepid fiscal support.

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