Talk of more guidance from the PBOC
The Financial News is a publication from the PBOC and chief economist Ma Jun writes today that policymakers should improve guidance to better help the economy.
He also argues that officials need to do a better job of keeping financial stability in mind when changing reserve requirement ratios or short-term interest rates.
The PBOC has much work to do on that front. They could start with scheduled meeting dates and/or clear guidance. The market relies on 'leaks' in state-run publications to estimate when cuts come. Even then, they're often a surprise and there is no communication to help the market digest moves.
Until recently, PBOC moves came on the weekend but the latest round of cuts was announced mid-week.
Earlier this month, the Shanghai Securities News reported the RRR was to be cut in December but that would now seem to run at odds with hopes for smoother delivery because year-end is so close.
Separately, Bloomberg cities traders saying the PBOC is gauging repo, reverse repo and bill demand in the 7, 14, 28 and 91-day market.
