LIC Agent in Nagpur



*Team MarketConnected Global Updates:*
"Topic in Trend: China rush the financial system with cash."
-PBOC pumped $165 billion into the domestic money markets last week, record for one week and highest since it pumped $136 billion in mid-September.
-Also bank would make 28-days loans available to several unidentified large commercial banks at market rates via a new mechanism called a temporary liquidity facility.
-Short-term tools are aimed at pre-empting a seasonal cash crunch without signaling a shift toward an easier monetary policy.
Impact:
-Short-term measures are used to ease financial conditions rather than blunter instruments such as interest-rate reductions because they want to avoid raising concerns about the economy health that might in turn encourage more heavy capital outflows from the country.
-Also money-market operations can quickly pull back if it decides that market conditions may have become too easy.
-While the PBOC wants to avoid a cash crunch, it is also eager to avoid fueling asset bubbles with cheap money. The central bank had actually been tightening the supply of inexpensive, short-term funds since September to discourage a boom in speculative bond investment.
-It raised interest rates on two sets of loans—which are six months and one year in duration—respectively, by 0.1 percentage point.
**News & Data Release:
-UK Supreme Court rules against government on Article 50. Govt cannot trigger Article 50 without consent of parliament.
-US credit rating agency Moody's warns that rising debt levels and interest rates will erode US' capacity to absorb shocks. Trump inherits modest deficit and healthy economy but challenges loom.
-December US existing home sales 5.49m vs 5.51m expected.
-January 2017 US Markit manufacturing PMI flash 55.1 vs 54.
-Eurozone Markit Jan mftg PMI flash 55.1 vs 54.8 exp.
-Germany Markit Jan mftg PMI flash 56.5 vs 55.4 exp.

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