High probability of a Chinese RRR cut in October - Nomura

FXStreet (Bali) - According to Nomura Asia Economics Team, there is high probability of a Chinese RRR (reserve requirement ratio) cut in October amid weak growth momentum.

Key Quotes

"Our proprietary indicators (Nomura’s China Composite Leading Index and China Growth Surprise index) continue to point to weakening growth momentum."

"Our Monetary Policy Signal Index indicates a relatively high likelihood (0.77) of easing in October."

"We see downside risks to our Q3 GDP growth forecast of 6.9% y-o-y and maintain our call for policy remaining an accommodative bias in Q4."