Chinese deleveraging expected to weigh on sentiment – UOB
Researchers at UOB Group assessed the potential effects of recently announced measures in China.
“Onshore financial markets saw renewed volatility in recent weeks, which are largely driven by concerns over new policy measures to curb systemic risks and deleveraging given that both global and domestic macro backdrop remains benign”.
“Chinese government stepped up policy measures to send message of market reform after the close of the 19th National Congress which include liberalizing of shareholding in the financial sector”.
“Onshore interest rate environment is likely to see further upside pressure in the coming months and we reiterate our view of possible policy rate hikes going into 2018 while the CNY continues to trend with the USD”.