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31 Mar 2014
Asia EM Express: Chinese banks' bad loans rise spurring growth concerns further
FXStreet (Łódź) - The latest sign that China's economic growth is slowing down is the level of bad loan writedowns, which among the country's five biggest banks collectively amounted to RMB59 billion for 2013. It is a 127% increase from the previous year, the Financial Times reports.
“Data also point to a deeper economic downturn in the first quarter than expected, Simon Rabinovitch suggests in Financial Times, adding that it puts China “on track this year for its slowest growth since 1990.”
On the other hand, as the BTMU team of analysts believe, the readiness of Chinese authorities to act in order to boost growth in the country to meet their target, ease investors' worries over the slowing economy.
According to the experts: “A commentary written in today’s Financial News stated that lowering the reserve ratio would cause markets to get the wrong signal that monetary policy is starting to be loosened and would delay the deleveraging process in China. It fits with the view that fiscal policy would be the most effective way to stimulate growth if required ahead.”
Economic data
The Bank of Korea informed on Sunday that the seasonally adjusted Korean Current Account surplus narrowed to USD 7.57B in February from USD 8.56B in January.
The unadjusted current account surplus stood at USD 4.52B in February, up from USD 3.61B in January.
Singaporean Bank Lending, also released on Sunday, pointed to an increase to SGD 584.5B in February from SGD 582.2B in January, according to the Monetary Authority of Singapore.
Technicals
The Chinese yuan fell further overnight following the PboC's decision to weaken the fixing for the fourth
consecutive day, with CNY set above 6.15 per dollar for the first time since the September last year.
The daily USD/CNY FXStreet Trend Index was slightly bullish, and the OB/OS Index neutral. RSI was neutral at 71.0431 at the last close. Daily 2-StDev Volatility Bandwidth was expanding at 359 pips, with ATR (14) shrinking at 151 pips. The 1D 200 SMA was at 6.1070, while the 1D 20 EMA at 6.1751.
“Data also point to a deeper economic downturn in the first quarter than expected, Simon Rabinovitch suggests in Financial Times, adding that it puts China “on track this year for its slowest growth since 1990.”
On the other hand, as the BTMU team of analysts believe, the readiness of Chinese authorities to act in order to boost growth in the country to meet their target, ease investors' worries over the slowing economy.
According to the experts: “A commentary written in today’s Financial News stated that lowering the reserve ratio would cause markets to get the wrong signal that monetary policy is starting to be loosened and would delay the deleveraging process in China. It fits with the view that fiscal policy would be the most effective way to stimulate growth if required ahead.”
Economic data
The Bank of Korea informed on Sunday that the seasonally adjusted Korean Current Account surplus narrowed to USD 7.57B in February from USD 8.56B in January.
The unadjusted current account surplus stood at USD 4.52B in February, up from USD 3.61B in January.
Singaporean Bank Lending, also released on Sunday, pointed to an increase to SGD 584.5B in February from SGD 582.2B in January, according to the Monetary Authority of Singapore.
Technicals
The Chinese yuan fell further overnight following the PboC's decision to weaken the fixing for the fourth
consecutive day, with CNY set above 6.15 per dollar for the first time since the September last year.
The daily USD/CNY FXStreet Trend Index was slightly bullish, and the OB/OS Index neutral. RSI was neutral at 71.0431 at the last close. Daily 2-StDev Volatility Bandwidth was expanding at 359 pips, with ATR (14) shrinking at 151 pips. The 1D 200 SMA was at 6.1070, while the 1D 20 EMA at 6.1751.