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cn macro
China Macro
Tracks China's macro policy and data: PBoC operations (LPR, MLF, RRR and rate moves), fiscal policy and special bonds, Politburo and State Council directives, plus GDP, CPI/PPI, PMI, credit, trade and the yuan.
DAILY DIGESTS
Daily digests
20 digests
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〔Day Digest〕PBoC-Goldman Talks, MOF 'Incremental' Pledge Coincide with +93bp Yuan Close and 11B Yuan Broad-Based ETF Inflow - State-Side Readouts Stay Single-Source
PBoC Governor Pan Gongsheng met Goldman Sachs President and COO Winthrop Smith on October 9 to discuss the global financial outlook and Chinese macro policy, the same session the onshore yuan closed at 6.6921, +93 bps, against a 6.7330 central parity fixed 37 pips firmer. MOF's H1 policy report pledges to deploy 'pragmatic, effective incremental policies' based on macro conditions and to refine fiscal-financial coordination to spur consumption and private investment, with 2026 central basic research spending up 16.3% YoY. Yet retail leverage is still soft: September margin new accounts of 108,900 rose just 1.4% MoM and are down 46.98% YoY, with the market average collateral ratio slipping to 268.38% from 282.22% at end-August. The contradiction - official-channel engagement and fiscal pledges versus a still-fragile year-on-year margin base and a 409-pip spot-parity gap - will be tested by the October data window and Botswana President Duma Gideon Boko's October 12-17 state visit.
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〔Overnight Brief〕Citi Warns 4% GDP Floor May Force a Q4 Pivot as PBOC Net-Drains 408.5bn Yuan and Local Bonds Hit 8.8tn YTD — Holiday Trips Up 0.6%, Yuan Stance Reaffirmed
Post-Golden Week liquidity came in tighter than the headline volumes suggest: the PBOC injected 1.806tn yuan via overnight and 3-month reverse repos on Oct 8 but net drained 408.5bn yuan once maturities were netted, with insiders flagging tax payments and month-end rollovers as the late-October risk. The funding backdrop sits against record local government bond supply — ~8.8tn yuan in the first three quarters, +3% YoY, with September alone near 1tn (+15%) — and a fresh Citi headline that 2026 GDP may need to "defend 4%" and that a policy turning point is near. The PBOC restated China will not pursue trade advantage through yuan depreciation, with Xinhua framing it as a clear policy position. Yet the holiday read was solid: 21.42bn cross-regional trips over the break, daily 3.06bn, +0.6% YoY, with rail up ~13%. Net: a primed backstop, a record debt pipeline, and a Q4 inflection question — the test is whether late-October liquidity turns net-additive.
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〔Day Digest〕PBOC Decouples RMB From Misalignment as ~30% of Trade Settles in Yuan, Germany Lifts 2026 GDP to 1.3%, Personal-Culture Service Exports Spike 57.8% - 30Y Flat at 116.860, Dow -300+ Into the Reopen
The People's Bank of China published a policy stance on the RMB arguing the exchange rate has no simple linear relationship with the current account and that Chinese trade has become structurally less sensitive to FX moves, with about 30% of trade settled in RMB and a 30% hedging ratio. Germany raised its 2026 GDP forecast to 1.3% from 0.5%, with 2026 inflation seen at 2.7%. AI micro-dramas surfaced as a service-export test case as personal culture/entertainment services jumped 57.8% in the first 7 months. The China-Laos Railway's cumulative trade value crossed 100.4 billion yuan with over 20.77 million tons moved. Yet bond futures closed mostly lower — the 30-year was flat at 116.860 and the 10-year slipped 0.05% to 109.360 — while foreign holdings of A-shares hit 4.66 trillion yuan, up nearly 30% from year-end 2025. The post-holiday open faces a Dow down 300+ overnight and a Hang Seng Tech rebalance.
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〔Overnight Brief〕Golden Week Volume +0.8% Clashes With Per-Capita Spend -2% to -4% as 100B Yuan of New Policy Tools Deploy and a 150B Yuan Capital-Injection Bond Prices Today — A-Shares Reopen Into a ~10x Forward P/E
The 2026 National Day holiday closed with a split: cross-regional trips in the first five days hit 1.55 billion person-times, up ~0.8% YoY, and Day 8 alone cleared 290 million, yet per-capita spend at scenic spots, duty-free outlets and cinemas fell 2-4%, with movie box office down 34% to its weakest National Day since 2018. Hong Kong logged ~1.41 million mainland visitors, above last year's 1.4 million, and Beijing's monitored commercial districts drew 60.35 million visits and 15.68 billion yuan in spending. The policy counterweight landed fast: new policy financial instruments deployed over 100 billion yuan since September, the PBoC cut PSL by 25bp to 1.5%, and a 150 billion yuan 5-year special treasury bond for central financial institution capital injection prices today. Insurance funds gained a new cross-border channel via Hong Kong Stock Connect ETFs (31 funds, 321.9 billion yuan AUM). A-shares reopen tomorrow at a forward P/E of ~10x, with foreign houses split between overweight and neutral. The falsifiable test: whether post-holiday demand fades harder than usual, as the strategy desk flags.
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〔Day Digest〕Shanghai Holiday Sales Hit ¥76.24B (+9.9%) as France-Germany File EU Trade-Defense Paper, PBOC Stacks 23rd Gold-Buy Month — Demand Hold vs. External Tool Build
National Day week closed with Shanghai's online+offline sales at ¥76.24B (+9.9% YoY) and tourism transactions ¥29.82B (+3.52%), backed by 20.2M visitor-trips and 1.2-cities-per-trip multi-city chaining. Yet the external channel hardened: France and Germany filed an informal Oct. 5 paper pushing the EU toward new trade-defense tools, drawing Beijing's warning that anti-discrimination, supply-chain security, and foreign-subsidy probes are on the table. Box office stayed soft (¥887M first five days vs. ¥1.33B prior year) and cross-region travel slipped -0.6% YoY, confirming per-capita softness. PBOC extended its gold-buying streak to 23 months (77.47M oz, +740K oz m/m) and rolled a 25bp PSL cut to 1.5% alongside a ¥1.4T sci-tech relending facility. US September nonfarm payrolls printed just +29K, pushing October Fed hike odds below 50%. Next tests: Q3 GDP print, any EU Commission follow-through on the Franco-German paper, and the US CPI/PPI pair.
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〔Overnight Brief〕Moody's Lifts Four Top Chinese Brokers to A3 as Shenzhen Non-Core Home Sales Jump 200% Over Golden Week — Domestic Tailwinds Meet EU Protectionist Letter, UK EV Tariff Talk
Over the National Day holiday, Shenzhen's non-core districts saw property sales jump 200% at one brokerage chain after purchase restrictions eased for non-resident buyers, while Moody's upgraded four top Chinese securities firms — CICC, CICC International, Citic Securities, and Guotai Junan — from Baa1 to A3, citing rising probability of official support. Brokerages struck a neutral-to-optimistic tone on Q4 A-shares, naming AI as a continuing theme. Yet the trade picture darkened: France and Germany submitted an informal letter to the European Commission on Oct 5 demanding stronger trade defense tools, and the UK floated higher tariffs on Chinese EVs, prompting pushback from both MOFCOM and MOFA. Hong Kong was reaffirmed as the world's freest economy. What decides next: the second China-EU trade and investment consultation meeting and European Commissioner Sefcovic's visit to China later this week.
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〔Day Digest〕HKD Pinches 7.85 on Carry Trade as BofA Ends Four-Year China Underweight, World Bank Lifts East Asia to 4.5%, Day-6 Travel Hits 305.5M - Rates vs. Reopening
The Hong Kong dollar is pinching the 7.85 weak-side convertibility undertaking on a widened US-HK interest rate gap and softer equity-linked demand, with HKMA Chief Eddie Yue framing any move as the Linked Exchange Rate system's automatic mechanism rather than a stress event. Yet, against this rate pressure, foreign houses have ended a four-year China underweight: BofA lifted global long-only China exposure to benchmark neutral, while Goldman, UBS, BlackRock, Invesco, Citi and Standard Chartered all turned more constructive. The macro backdrop supports the reweighting - the World Bank raised its East Asia and Pacific growth forecast to 4.5%, Hong Kong's September S&P Global Manufacturing PMI slipped to 49.2 from 49.5, and the National Day holiday produced 305.5M cross-regional trips on October 6 (-1.2% y/y) and 303.3M on October 5 (+1.7% y/y). What decides next: whether the HKMA has to actually defend the band, and whether October property data confirms Shanghai's "Silver October" opening.
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〔Overnight Brief〕700B RMB Targeted Tools Skip RRR Cut, Yantian Logs 28,684-TEU Single-Vessel Record, Šefcovič Heads to Beijing Oct 8-9 With EUR 400B Goods Deficit - Targeted Easing vs Trade Test
The PBoC's "four arrows" landed on Sept 29 — a 700 billion RMB package of targeted tools paired with the MOF's housing mortgage interest subsidy, deliberately skipping an RRR or benchmark rate cut, each tool routed through a designated channel with eligibility gates. The PBoC MPC's Q3 communique on Sept 24 set the tone, the State Council on Sept 28 called for stepped-up macro effort, and the package followed a day later. On the consumption side, Yantian set a Chinese port single-vessel record at 28,684 TEU on Oct 2, running 100+ global weekly routes with 53 to APEC economies, while Hunan logged 13.28 million tourists on National Day day-five. Yet the external calendar is dense: EU Commissioner for Trade and Security Maroš Šefcovič visits Beijing Oct 8-9 with a EUR 400 billion 12-month manufactured goods deficit (2.1% of GDP, below the 2.5% 2022 peak) on the table. What decides next: the tool-level detail in the PBoC and MOF primary releases, and the readout from the Šefcovič meeting.
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〔Day Digest〕Mortgage Subsidy Kicks In, Golden-Week Property Pockets Light Up; September PPI Heads for 4.5% Year-High while 2% 3-Year CDs Reappear — Demand-Side Cut vs Funding-Cost Pinch
The '828 reform' and a 1 October mortgage interest subsidy powered a Golden-Week property rebound — Wuhan new-home sales up more than 10% y/y for Oct 1-3, Foshan's five districts reporting rising foot traffic, and Beijing's two-airport cluster clearing 100 million passengers 17 days ahead of 2025. September bulk-commodity prices rose 4.1% m/m, and a broker preview puts September PPI at roughly 4.5% y/y — a fresh year high — with Q3 GDP tracking 4.5% and retail sales at just +0.5% y/y. Yet the structural counterweight is re-pricing funding: smaller banks have relaunched a 2.0% annualized 3-year large CD as mortgage easing lands, and high-tech investment is the only growth contributor in a still-negative FAI picture. Next: the September data print, the CIIE opening, and whether supply-side property risk controls match the demand-side cost cuts.
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〔Overnight Brief〕HK Primary Sales +61.6% m/m on Cheung Sha Wan Sell-Outs, While MOFCOM Calls Holiday Spend "Stable and Orderly" as County Tourism Substitutes for Trade-In, and the Sept 10 SME Payment Crackdown Reshapes Trade Credit
Hong Kong's primary residential market logged 1,500 transactions worth HK$20.88 billion in September, up 61.6% and 73.0% m/m — a three-month high — driven by China Resources Land's Cheung Sha Wan Yuijong II selling all 153 launch units (four bulk buyers took four each) before clearing 129 follow-on units, with the secondary market firming 11.4% on volume. Yet the National Day holiday, past its halfway mark, reads as "stable and orderly" per MOFCOM rather than blockbuster, with growth pivoting to county-level mountain and border tourism. The backdrop: the State Council General Office's Sept 10 notice 国办发〔2026〕24号 and a Sept 14 State Council Information Office briefing cracking down on large firms "rolling payment terms" against SME suppliers. The week decides on China's September FX reserves and M2 alongside the Fed's September FOMC meeting minutes.
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〔Day Digest〕Golden Week Travel Hits 303.57M Person-Trips, Hainan Duty-Free Climbs 8.85% to ¥358M — A-Share IPO Proceeds Triple to ¥216.3B but One ¥66.6B Deal Carries the Print, Sentiment Stays Sub-38
National Day holiday demand is running hot: Oct 3 cross-regional passenger flow hit 303.568 million person-trips per the Ministry of Transport, Oct 4 rail passengers reached 19.273 million (+6.1% YoY), and Hainan duty-free sales in the first three days totaled 358 million yuan (+8.85% YoY), underwritten by 62.5 billion yuan of ultra-long special treasury for consumer-goods trade-in and 100 billion yuan of fiscal-financial synergy for personal consumption loan interest subsidies that landed pre-holiday. Yet the equity side is split: A-share IPO proceeds tripled to 216.315 billion yuan in Q1-Q3 with zero first-day breakouts, but the September sentiment index failed to break 55 and slipped back below 38, and a single ChangXin Memory IPO at 66.607 billion yuan carried ~30.8% of the Q1-Q3 IPO total. Net: a demand engine with a stalled sentiment pulse. What decides: whether the post-holiday sentiment read reclaims 55 and whether follow-on offerings recover from their -40% YoY trough.
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〔Overnight Brief〕Fourth 62.5bn Yuan Trade-In Tranche Lands Pre-Holiday, Tianjin Layers 500-1,500 Yuan Subsidies and 300+ Events: CITIC Calls a First-Tier Property Bottom — Canal Series Frames the Capex Backdrop
The 4th batch of 62.5bn yuan in ultra-long special treasury bonds for consumer goods trade-in landed before the National Day holiday, with Tianjin stacking local subsidies of up to 500 yuan on digital products and 1,500 yuan on appliances and running 300+ promotional events. Yet the consumption story is being underwritten by a parallel property pivot: CITIC Securities reads first-tier rents rising month-over-month and a rising share of second-hand projects reaching rent-yield parity (供平过租) as a Hong Kong-late-2024 analogue and a "strong signal" of price bottom, turning bullish on developers and leading brokerages. The falsifiable tests are post-holiday pull-through on trade-in demand and whether the People's Daily Guangxi-canal series translates into industrial capex commitment.
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〔Day Digest〕Mortgage Subsidy Pushes Tier-1 Cities Toward 'Payment Below Rent' as Golden September Splits — Local Strength +15.7% y/y vs 44-City New Home -17.8%
The 9.29 nationwide rollout of a 1%-annual first-home mortgage subsidy (up to 5 years, on loans ≤1M yuan, for properties ≤120 sqm and ≤1.5M yuan) combined with the 8.28 extension of mortgage terms from 30 to 40 years is pushing first-tier cities toward 'payment below rent' (供平过租), a condition Hong Kong hit in late 2024 ahead of its housing bottom. Tier-1 transaction data for September confirms the local bounce: Shanghai second-hand 23,581 units (+15.7% y/y), 20-city second-hand 1.19 million units (+7.4% y/y). Yet the 44-city new home series decelerated to -17.8% y/y from August's -10%, and 22-city second-hand slowed from +6.1% to +0.4%. The falsifiable test is whether October's tier-1 momentum broadens or remains localized.
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〔Overnight Brief〕Day-2 Cross-Regional Trips Top 300M as August Retail Crawls at +0.4% m/m and Auto Slumps -18.5% — Movement Without Big-Ticket Spending
The National Day holiday opened with record cross-regional travel — day 1 peak 340M person-times with 24.4M rail passengers (a National Day record) and 71M highway vehicle trips, self-driving 90%+; day 2 still over 300M; total holiday expected 2.13B. Yet the spending counterpart stays anaemic: Jan-Aug retail sales only +1.1% y/y, August single-month +0.4% m/m, auto -18.5%, furniture -7.9%, with 60%+ of urban households leaning toward more saving. Offshore yuan firmed 84 pips to 6.7058 against the dollar on Friday NY close, intraday range 6.7008-6.7192. G20 trade ministers met in Milwaukee Sept 30-Oct 1 with a joint statement only on food; no outcomes on overcapacity, forced labor, or MFN. Wang Zhe's September New Economy Index fell 0.9 pts m/m. The decisive test: October retail and catering receipts released in early November — they tell whether the holiday pulse is real or whether durable goods stay frozen.
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〔Day Digest〕China Holiday Demand Holds: 100-City New Home +0.17% vs Secondhand -6.94%, HK Retail Beats 5.6% on 329M Trips — Yet US 10Y Tops 5.34% and 30Y Mortgage Spikes 25bps in a 4-Year Long-End Rout
China's 100-city new home prices rose 0.17% m/m to 17,285 yuan/sqm in September while secondhand fell 0.6% m/m (-6.94% y/y), as the National Day week opened with 329.495M cross-regional trips and Hong Kong's August retail beat at +5.6% y/y. Yet the global long end is forcing the opposite tape: the US 10-year touched 5.34% — its highest since 2002 — pushing the 30-year mortgage up 25bps in a week to 7.28% and driving a 4.4% September drop in US municipal bonds, the worst month since Lehman. H1 foreign equity direct investment of $63.8B (+55% y/y) provided a quiet anchor. What decides next is whether the holiday demand signal — HK retail, travel volume, Hainan duty-free +21.17% y/y — holds through Golden Week or fades into Q4 data.
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〔Overnight Brief〕Fed's Jefferson Trims October Hike Odds to 24% as ISM Price Gauge Jumps to 77.9 — Front-End Eases, Long-End Sells on Reflation
Fed Vice Chair Philip Jefferson said officials may need more time before deciding whether to hike again, dragging the implied probability of an October move to below 24% from roughly 70% earlier in the week. Yet the September ISM Manufacturing Index held at 54.5 — ninth straight month above 50 — and its price index jumped to 77.9 from 71.1, a four-month high, dragging the S&P 500 into the red and pushing the 30-year yield to the front of the curve selloff. President Trump called continued Fed hikes "very bad" and said the U.S. could escalate strikes on Iran after the November midterms. A split labor print — Challenger layoffs down roughly 20% y/y to a four-year September low but hiring plans at a 15-year September low — leaves the next inflation print as the deciding factor.
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〔Day Digest〕10Y UST at 5.33%, UK 30Y Pierces 6% as Yen-Carry vs JGB-Repricing Split Dominates the Rout — China Stands Apart with 25bp PSL Cut to 1.5%
Global long-end yields ripped higher on the new quarter's first session: the US 10-year touched 5.33%, above the 2007 peak and a level unseen since 2002, while the UK 30-year pierced 6% for the first time since March 1998 and the French-German 10-year spread widened to 131bp, the widest since June 2012. The driver debate split sharply — Yardeni Research pinned the move on yen carry-trade unwinds as the BOJ tightens, while Deutsche Bank pointed instead to JGB yields themselves repricing, with Goldman flagging CTA net shorts at a record -$170bn DV01 globally. In direct contrast, China's PBOC cut the PSL rate 25bp to 1.5%, expanded the facility to the 'six networks' and a science-tech re-lending tool, while Finance Minister Lan Fo'an announced 300bn yuan of special treasury bonds for central financial institutions and a mortgage-interest subsidy pulling new commercial loan rates toward 2%. Asia closed firmer (Nikkei +3.30% to 68,956.72, KOSPI +1.95% to 6,971.36) while European equities and US futures sold off; the falsifiable test is whether Japan's curve can stabilize.
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〔Overnight Brief〕Core PCE 3.0% on BEA Reset, Goldman to December, October Hike Odds to ~39% — Yet 2Y Recovers, 6-Month Annualized Climbs to 3.6%, $132.6B Deficit Widens
August core PCE came in at 3.0% YoY (vs 3.3% expected) and Goldman pushed its second 2026 Fed hike call from October to December, with CME FedWatch now pricing October at ~39% (from ~45%) and December at ~90%. Yet the dovish print is largely a BEA methodology reset, not actual cooling: the 6-month annualized core PCE sits at 3.6%, up from 3.3%, and market-priced inflation measures still run near 3% with no progress to 2%. The 2-year yield dipped to 4.864% from 4.887% then fully recovered. On the data side, the August goods trade deficit widened 11.5% to $132.6 billion, the largest since early 2025, with Atlanta Fed GDPNow pegging net exports as a 1.37pp drag on Q3 GDP. In China, the central-finance mortgage interest subsidy went live October 1, taking effective rates to ~2% on first homes ≤120 sqm and ≤1.5 million yuan, while the PBOC announced a 1.2 trillion yuan outright reverse repo and September manufacturing PMI rose to 50.1.
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〔Day Digest〕PBOC Stages 1.2T Yuan Buyback as Banks Hit Records and PMI Returns to 50.1, Yet Tonight's PCE Tests 91% December Hike Odds and the Hedge-Fund 7% of Treasuries — China Easing vs US Path
The People's Bank of China announced a 1.2 trillion yuan 3-month (89-day) buyback reverse repo for Oct 8, maturing Jan 5, 2027, to keep banking system liquidity ample. Bank stocks surged on the same morning — ICBC and Bank of China hit fresh highs, the CSI Banks Index closed +1.52% — after a 25bp PSL rate cut to 1.5% and a MOF mortgage interest subsidy. September PMI returned to expansion: manufacturing 50.1% (prev 49.8%), non-manufacturing 50.2% (prev 49%). Yet the cross-border test is tonight's August US PCE, expected at 3.7% headline / 3.3% core y/y, with a BEA methodology overhaul that Citi says could cut recent core PCE by 15-45bps. December Fed hike odds are 91%, October 47%, and spot gold at $4,193.7/oz is down 5%+ this month. Hedge funds now hold a record 7% ($2 trillion) of US Treasuries, with leverage near historic highs. Tonight's print — and its revision path — decides whether China-side easing persists or the US tightening channel reasserts.
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〔Overnight Brief〕PBoC Trims PSL 25bp to 1.5% and Rolls First National Mortgage Subsidy; Fed October Hike Odds Slip to 50% on Williams' 'No Rush' — Diesel Spread at Record $100/bbl
The People's Bank of China cut the 1-year PSL rate 25bp to 1.5% and extended support to the "six networks" (water, new grid, computing, next-gen communications, urban underground pipelines, logistics), while the Ministry of Finance, PBoC and NFRA rolled out the first national mortgage interest subsidy effective October 1 — first-home only, ≤120 sqm and ≤1.5M yuan, 1 percentage point annual subsidy for up to 5 years, saving up to ~50K yuan per borrower. The State Council framed both moves as a stepped-up property and demand-side push. Yet overnight, NY Fed President John Williams said another hike this year "may be appropriate" but "no need to rush," pulling the implied October 27-28 hike probability from ~70% to 50%. August JOLTS slipped to 7.079M (a third consecutive miss), and Morgan Stanley's Xing Ziqiang flagged a record $100/bbl diesel-Brent spread as a hidden energy tail. The Wednesday calendar — China's official manufacturing PMI, US Q2 GDP final, August core PCE, and ADP — decides whether the dovish Fed repricing holds.