Mainland shares in China managed to log sizable gains on Monday despite new tariffs going into effect over the weekend and unrest in Hong Kong.
The Caixin PMI came in better than the official gauge (50.4 versus NBS 49.5) and that helped sentiment, but so did a State Council statement which promised more support in the event things deteriorate further.
Liquidity will remain "reasonably ample", as will TSF growth, the Council’s financial stability and development committee said at a conference presided over by Liu He. The statement reiterated a "proactive" bent for fiscal policy.
Note the bottom pane: Mainland shares are reasonably resilient despite the yuan's marked depreciation.
"Unlike previous periods of steep CNY decline, policymakers are in control and have the tools to slow down, limit, or fully halt depreciation", SocGen writes, in a new note highlighting and explaining the apparent discrepancy, which has only manifested itself to this degree on one other occasion, namely in July of 2018 when the vaunted "National Team" was likely hard at work propping up domestic equities.
"With concerns about capital flight less acute than in 2015 and 2016, investors ca
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