Daily FNArena News - International

Further reform of the Chinese financial landscape has been announced. Expect more tightening as well.

Inflows of capital throughout Asia are growing as the region is an increasingly attractive investment destination and economies should benefit as the inflows aid development.

The People’S Bank of China has again lifted bank reserve requirements but the experts see it as a less effective policy move than lifting interest rates and allowing the currency to appreciate.

Westpac agrees with the market that the Bank of Japan won’t lift rates this week, but expects increases in coming months given the economic outlook remains positive.

A stronger than expected quarterly growth outcome of 11.1% has the market anticipating further tightening measures for the Chinese economy, but any changes are unlikely to be rushed through.

Gavekal Research suggests the boom in Chinese equity markets is far from over. The Chinese government could benefit by giving investors exposure to foreign markets as well.

No longer content to simply park its US$1 trillion of foreign currency reserves in safe US Treasuries, China is looking to diversify and profit. This is not good news for the US dollar.

CLSA’s monthly survey into trading conditions for Chinese manufacturers revealed very, very buoyant conditions. If anything, more measurements to slow down seem necessary.

As the PBoC raises reserve requirements yet again, there is no end in sight for the Chinese investment frenzy.

Latest figures show increasing inflationary pressures in the Chinese economy, with both BDS and Credit Suisse anticipating higher interest rates in response.