An article on the Federal Reserve via the Nikkei, its an opinion piece well worth a read about how the FOMC is going to dial back its extraordinary stimulus and makes the point that:

  • both the PBOC and the BOJ may ultimately outpace the Fed in moving away from free money

Here's the link (may be gated)

For yuan traders the article provides good background on where the PBOC is at as of now:

  • The PBOC is tweaking overnight repo rate dynamics.
  • It is using "macroprudential" tools to cool asset markets.
  • It is capping credit to overleveraged sectors like housing and shadow banking entities.
  • Meantime, it is making liquidity more accessible for small businesses, and spearheading moves to shift debt burdens from local municipalities to central-government entities.

The winding back of stimulus measures in China has been a factor weighing on the AUD in recent weeks/months. Commodity prices have still been strong but looking forwards maybe not so much?

audusd chart pboc stimulus