|
Chinese trade data released over the weekend undershot
forecasts, while figures out on Monday showed inflation rising
in the country's factory sector, potentially adding extra
strains.
JPMorgan reduced its quarter-on-quarter growth estimate for the
third three months of the year to 2.0% from 4.3%, and trimmed
its full-year forecast to 8.9% from 9.1%.
Morgan Stanley lowered its quarterly forecast to 1.6%, while
Goldman cut its estimate to 2.3% from 5.8% and to 8.3% versus
8.6% for the full year.
"Recent developments point at further downside risks to already
soft 3Q growth forecasts, related to the spread of the Delta
variant, a series of regulatory changes in new economy sectors,
and erosion of market confidence," JPMorgan's analysts said.
Both JPMorgan and Morgan Stanley also predicted Chinese
authorities would respond with support measures.
On the monetary policy front, JPMorgan said the People's Bank of
China's main policy rates were likely to be trimmed by 5 basis
points in the fourth quarter, while it would deliver two more 50
basis point cuts to banks' reserve requirements (RRR), the first
in October and another in January.
It has already provided one cut last month.
Morgan Stanley said it expected one 50 bps RRR cut before the
end of the year and that government bond issuance could
accelerate in coming months to support infrastructure
investment.
"A mild deceleration in exports in 2H and an ongoing slowdown in
domestic demand amid Delta resurgence mean policy support could
ramp up in coming months," the bank said.
(Reporting by Marc JonesEditing by David Goodman and David
Holmes)
[© 2021 Thomson Reuters. All rights
reserved.] Copyright 2021 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content.
|
|
