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Analysts at Deutsche Bank point out that yesterday’s headlines out of the Politburo in China suggesting that more stimulus may be on the way is perhaps helping sentiment overnight, however our economists thought the message from the official press release was subtle.

Key Quotes

“They note that the government did recognise the economic slowdown and promised to take “timely actions”, as widely reported by journalists. But the government also mentioned that (1) the focus of the economy has moved from speed to quality; and more importantly (2) some policies have been released, and their effect will be transmitted to the economy with a lag.”

“Our economists think that these subtle messages suggest likely disagreements in the government. They highlight that while some may be worried about the downside risk to the economy, others may argue the slowdown is natural and push against aggressive policy easing.”