{"id":1534625,"date":"2025-05-07T14:05:00","date_gmt":"2025-05-07T18:05:00","guid":{"rendered":"https:\/\/bugaluu.com\/news\/?p=1534625"},"modified":"2025-05-07T14:05:00","modified_gmt":"2025-05-07T18:05:00","slug":"rabo-at-least-the-pboc-is-doing-something-while-the-fed-will-do-nothing-at-all","status":"publish","type":"post","link":"https:\/\/bugaluu.com\/news\/rabo-at-least-the-pboc-is-doing-something-while-the-fed-will-do-nothing-at-all\/1534625\/","title":{"rendered":"Rabo: “At Least The PBOC Is Doing Something, While The Fed Will Do Nothing At All”"},"content":{"rendered":"

Rabo: “At Least The PBOC Is Doing Something, While The Fed Will Do Nothing At All”<\/span><\/p>\n

\n

By Michael Every of Rabobank<\/em><\/p>\n

It\u2019s the Fed today but the rest of the world is rudely busy elsewhere.<\/p>\n

In geopolitics:\u00a0<\/em><\/p>\n

India\u2019s military struck \u201cterrorist infrastructure\u201d in Pakistan. Islamabad called this \u201can act of war\u201d <\/strong>and claimed to have shot down 2 Indian fighter jets, disputed by India. There is little danger of these nuclear powers escalating to that level, but we now have three major global military actions\/wars underway, again disrupting supply chains and \u201cbecause markets\u201d thinking.<\/p>\n

Conversely, the US will stop striking the Houthis, claiming they will stop attacking ships in the Red Sea<\/strong>: did President Trump take the Houthis out, or did the Houthis taqiyya <\/em>Trump out? If true, this could see freight rates fall as Suez reopens to business.<\/p>\n

However, this bilateral ceasefire doesn\u2019t apply to Houthi attacks on Israel<\/strong>, who got no heads up of the Trump decision. On that note he added, \u201cI\u2019ll discuss that if something happens.\u201d Like international airports being hit, as just happened to both sides (one much harder than the other)?<\/p>\n

A Sudanese paramilitary is attacking the Red Sea\u2019s Port Sudan and its airport<\/strong>. All aid comes in from there, which Houthi action had already disrupted. Without it, 25 million Sudanese face starvation risks\u2026 with minimal western media coverage or public outrage.<\/p>\n

Trump stated, \u201cIt\u2019s crunch time for Iran,\u201d then teased, \u201cA very BIG announcement\u2026 and it’s really positive\u2026 One of the most important announcements in many, many years,\u201d<\/strong> ahead of his trip to the Middle East starting Monday. Who knows what that means.<\/p>\n

Trump also said he didn\u2019t need any Canadian products before meeting Canadian PM Carney<\/strong>; then flattered him; then told him perhaps the USMCA trade deal wasn\u2019t needed anymore; then replied, \u201cNever say never,\u201d when told Canada was never going to be for sale. A Canadian take was: \u201cMr. Trump did not move on his trade war with Canada. Not an inch. In the Oval Office, Mr. Carney wasn\u2018t nearly as tough-talking as he had been when campaigning for office<\/em>.\u201d<\/p>\n

The Wall Street Journal reports \u2018US Orders Intelligence Agencies to Step Up Spying on Greenland\u2019<\/strong>, where this \u201cEffort underscores the seriousness of Trump\u2019s intent to acquire the island from Denmark.\u201d That\u2019s at least consistent \u2013 and again, welcome to Monroe Doctrine realpolitik.<\/p>\n

German Chancellor Merz humiliatingly failed to be elected by the Bundestag at his first attempt, only getting there second time round<\/strong>, and still with a few defectors from his coalition. Not the best of starts for what\u2019s supposed to be a transformative period of leadership, as the AfD rises above his CDU to become the most popular party in the country.<\/p>\n

In geoeconomics:<\/em><\/p>\n

The UK agreed an FTA with India<\/strong> allowing citizens from both to avoid paying National Insurance (NI) if working in the other for three years, which hugely favours India. This is sold as a win by the Labour Party that cut winter fuel allowances to pensioners to look tough, raising little revenue but smashing its popularity. This deal adds \u00a34.8bn to UK GDP by 2040, so under 10 pence a week per capita, and is opposed by the Conservative and Reform parties and even some Labour MPs privately, given the government just raised NI on workers. The Daily Mail puts it: \u201cFury at ‘two-tier Keir’s’ tax break for Indian workers that will make it cheaper to employ foreign staff.\u201d\u00a0<\/p>\n

From the India side this is being acclaimed as a big win, and it is<\/strong>. Moreover, in their eyes the chances of the UK now flooding them with manufactured goods, as happened with their ASEAN FTA, is minimal given the UK doesn\u2019t make much they need. Note their underlying assumption that FTAs are aimed at net exporting more while the UK seems to think they are a good thing, \u201cbecause markets.\u201d<\/p>\n

US Treasury Secretary Bessent again said the US is close to trade deals with 17 countries<\/strong>, and again these could be announced soon. He added the US doesn\u2019t wish to decouple from China<\/strong>, just regain production in key sectors.<\/p>\n

He and the USTR are to travel to Switzerland later this week to meet Chinese economic officials, including Vice Premier He Lifeng, for talks<\/strong>. These are apparently aimed at de-escalation rather than a trade deal. However, China\u2019s Commerce Ministry said these must be \u201cequitable and mutually beneficial [and] China will safeguard its national interest and won\u2019t compromise principles for an agreement.\u201d Where that leaves room for compromise remains to be seen, but markets will love it regardless.<\/p>\n

Politico says, \u2018EU countries soften push to stop Chinese tech buyouts\u2019<\/strong> as \u201cCapitals are set to weaken rules that would require them to scrutinize foreign investments in sensitive technologies such as semiconductors and AI, a draft document shows.\u201d Really, what could go wrong there as the US makes clear it *will* decouple from China in these areas, and China\u2019s Xi heads to Moscow to wave next to Russia\u2019s Putin?<\/p>\n

Notable for its zeitgeist, the FT\u2019s Martin Wolf appears to have had a Damascene conversion in his latest op-ed. He now wants the US and <\/em>China to lose the trade war because the latter is a mercantilist <\/strong>(who knew!) – but he still believes it must shift to domestic consumption ahead, \u201cbecause markets.\u201d Which is of course how all mercantilists think and act, right?\u00a0<\/p>\n

In markets:<\/em><\/p>\n

The PBOC cut its 7-day reverse repo rate from 1.5% to 1.4% and trimmed banks\u2019 Reserve Requirement Ratio another 50bps<\/strong>, alongside a 25bp cut for targeted lending to priority sectors like tech and green finance and to housing loans, as well as increasing facilities like the Securities, Fund, and Insurance Swap Facility and share buyback lending programs by CNY800bn. It also pledged to maintain \u201cample liquidity\u201d through tools like the Medium-term Lending Facility (MLF) and open market operations. However, none of the above measures individually or collectively have managed to reverse the trend lower in underlying GDP growth rates and consumer sentiment so far, and they look even less able to lean against the tectonic plate-shifting going on in geopolitics and geoeconomics.<\/p>\n

Then again, at least the PBOC are doing something<\/em>, when the Fed today is likely to do nothing at all<\/em>.<\/strong><\/p>\n

China’s central bank cuts key rates, injects 1 trillion yuan 3 hours after agreeing to trade talks to prop up economy and give communist party ammo for negotiations.<\/p>\n

Tomorrow the Fed will do precisely none of that.<\/p>\n

\u2014 zerohedge (@zerohedge) May 7, 2025<\/a>\n<\/div>\n

Tyler Durden<\/a><\/span>
\nWed, 05\/07\/2025 – 10:05<\/span><\/p>\n

\u200bhttps:\/\/www.zerohedge.com\/markets\/rabo-least-pboc-doing-something-while-fed-will-do-nothing-all<\/a>\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"

Rabo: “At Least The PBOC Is Doing Something, While The Fed Will Do Nothing At All” By Michael Every of Rabobank It\u2019s the Fed today…<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1534625","post","type-post","status-publish","format-standard","hentry","category-news","wpcat-1-id"],"_links":{"self":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1534625","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/comments?post=1534625"}],"version-history":[{"count":0,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1534625\/revisions"}],"wp:attachment":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/media?parent=1534625"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/categories?post=1534625"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/tags?post=1534625"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}