China’s major economic data is scheduled for release in the week ahead. On Thursday, the People’s Bank of China will set the Medium-Term Lending Facility (MLF) rate, and we are expecting it to remain unchanged after last month’s rate cuts. It also seems likely that future monetary policy adjustments could start from the 7-day reverse repo rate as in July, making the MLF update less of a significant event for the market than in the past.
China will also publish the 70-city housing price data, and key economic activity data on the same day. We are looking for a smaller decline in property prices, and if more tier-one or two cities see some price stabilisation, this would be another positive step along the road to restoring confidence. Retail sales should see a bit of recovery after hitting a post-pandemic low last month on technical factors, and industrial production and FAI could see some stabilisation as well this month.
