Expect significant new tariffs on Chinese imports and moderate levies on goods from other nations , as President-elect Donald Trump rolls out his protectionist agenda. However, with his preference for chaotic policymaking and sudden shifts , there’s uncertainty on how soon these import taxes will actually hit. Dubbed “ Tariff Man ,” Trump aims to use tariffs both strategically and tactically . He’s mentioned taxing all Chinese goods up to 60% and potentially setting 10%-20% tariffs on imports globally , but details on these plans remain vague . Key players within Trump’s team are divided: Robert Lighthizer , a staunch tariff advocate, sees permanent duties as crucial to balance US trade , while others, like billionaires John Paulson and Scott Bessent , view tariffs as temporary leverage. Trump’s previous administration had mixed feelings, especially on national security-related trade limits , which he sometimes dismissed, favoring an “open for business” approach. High-profile busin
The People's Bank of China (PBOC) has ramped up its net purchases of sovereign bonds, acquiring a total of 200 billion yuan ($28.5 billion) from dealers in September. This figure surpasses the amount of bonds bought in the previous month and highlights the central bank's commitment to maintaining adequate liquidity in the banking system and reinforcing counter-cyclical monetary policy adjustments.
While the PBOC did not specify the tenors of the bonds purchased or the timing of these operations, it has indicated a shift in strategy. Last month, the central bank bought short-tenor government bonds while selling longer-tenor notes, a move aimed at managing liquidity and stabilizing the financial environment.
Recent market conditions have been tumultuous, marked by a flurry of stimulus announcements and reports of special sovereign bond issuance, which temporarily halted the bond-buying frenzy. The yield on the benchmark bond surged to 2.26%, the highest level since mid-July, before easing off ahead of China's upcoming week-long holiday.
Concerns over a sluggish economy had previously driven the benchmark 10-year yield below 2% for the first time on record, prompting traders to remain vigilant regarding potential central bank interventions. This caution is heightened by the PBOC's awareness of how fluctuations in US Treasuries can impact the market, particularly following the collapse of Silicon Valley Bank earlier this year.
PBOC Governor Pan Gongsheng has emphasized that the central bank will continue to address "problematic acts" within the bond market. He has outlined a series of stimulus measures, including reductions in key interest rates, in an effort to achieve China's 5% growth target for the year.
The PBOC is adopting a more proactive approach to manage the bond market dynamics, transitioning from initial verbal warnings to direct actions. In July, the central bank revealed it had "hundreds of billions" of yuan of securities available through agreements with lenders, signaling its readiness to intervene as necessary.
As the PBOC continues to navigate the complexities of the bond market, its recent actions underline a strategic focus on ensuring stability and liquidity amid a challenging economic landscape.
Comments
Post a Comment