The focus of the calendar is on the PBOC’s Loan Prime Rate Setting. No rate changes are expected. Earlier this week the Medium-term Lending Facility (MLF) rate was left unchanged, this is a guide to what to expect from the LPR setting.
Current LPR rates are:
- 3.55% for the one year
- 4.20% for the five year
If you need, background on the LPRs:
- It is an interest rate benchmark used in China, set by the People’s Bank of China each month. While set on the 20th the new LPR takes effect on the first day of the following month.
- The LPR serves as a reference rate for banks when they determine the interest rates for (primarily new) loans issued to their customers.
- Its calculated based on the interest rates that a panel of 18 selected commercial banks in China submit daily to the PBOC.
- The panel consists of both domestic and foreign banks, with different weights assigned to each bank’s contributions based on their size and importance in the Chinese financial system.
- The LPR is based on the average rates submitted by these panel banks, with the highest and lowest rates excluded to reduce volatility and manipulation. The remaining rates are then ranked, and the median rate becomes the LPR.
Also on the data docket today are two items from Australia, the quarterly National Australia Bank Business Survey. This does not attract the same amount of attention as the monthly NAB Business Survey. Both surveys aim to provide insights into the state of the economy and the performance of businesses. There are some key differences between the two, apart from the obvious (frequency of data collection and timeliness of release) a key difference is scope of coverage:
- The monthly business survey is focused on providing a timely snapshot of the business environment in Australia. It covers a wide range of sectors and provides data on business conditions, business confidence, sales, profits, employment, and other key indicators.
- The quarterly survey is more in-depth. It includes more detailed questions on specific topics such as investment intentions, borrowing, and exports.
- The quarterly survey has a larger sample size.
While both surveys provide valuable insights into the current state of the economy, the quarterly survey is better suited for identifying longer-term trends. This is because it includes more detailed questions on investment intentions and other forward-looking indicators that can provide insights into future economic activity.
Of more interest is the monthly labour market report. I’ll have more to come on this separately.
This
snapshot from the ForexLive economic data calendar, access
it here.
The
times in the left-most column are GMT.
The
numbers in the right-most column are the ‘prior’ (previous
month/quarter as the case may be) result. The number in the column
next to that, where there is a number, is the consensus median
expected.