After a disappointing FM press conference on Saturday & a weak CPI & PPI data today, we expect Chinese equities to open weaker on Monday and consolidate at current levels. Even commodities might give in their recent gains & consolidate for some time. Any further trigger can come only in late October when the standing committee of the National People's Congress reviews and votes on specific proposals. That might be the last opportunity for Chinese policy makers to unveil their fiscal stimulus transparently else Chinese equities recent outperformance might again fade like it has done so many times in past. Any fiscal stimulus size less than 2TN RMB of new issuance of special CGBs in REMCY24 or any lack of measures targeting consumption might further disappoint global investors & lead to further correction in Chinese equities & commodities. With US election results on 5th Nov, Chinese fiscal response has to be swift & large before the tariffs hit them irrespective of who wins in the US presidential elections.
