Bloomberg Daybreak: Asia Edition China Signals Bolder Stimulus, Markets Brace for CPI Data
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Dec 10, 2024 Jill Disis, Bloomberg News Desk Editor, and Lawrence Gillum, Chief Fixed Income Strategist at LPL Financial, explore China's bold economic stimulus shifts and regulatory challenges impacting global markets. They discuss deflation's effects on consumer confidence and how U.S.-China tensions shape economic policies. Anticipation builds around upcoming CPI data as the duo analyzes its potential influence on Fed rate cuts and bond market trends. The conversation also touches on tariff uncertainties and emerging income opportunities in fixed income markets.
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China's Policy Shift
- China's Politburo signals a shift to moderately loose monetary policy for 2025.
- This change, the first in 14 years, responds to deflation concerns, economic growth worries, and geopolitical factors.
China-US Relations and Stimulus
- China's stimulus might be related to anticipating a more adversarial relationship with the U.S. under a new Trump administration.
- Xi Jinping is likely mindful of the past trade war and Trump's campaign rhetoric on tariffs.
Stimulus Targets
- China's stimulus aims to boost weak consumer and business sentiment, addressing the struggling property market and equity market.
- The government seeks to revive these markets without significantly increasing debt burdens.