From China today we had a barrage of measures introduced into the National People’s Congress (NPC) for consideration. The NPC is China’s annual parliament that began meeting this week and will do so through March 11. The most important points to note:
China’s GDP growth target for 2025 is once again “around 5%”the target for the urban unemployment rate around 5.5%CPI target around 2%, from 3% currently 2025 budget deficit at 4% of GDP 2025 national budget deficit at 5.66tln yuan 2025 quota on local government special bonds at 4.4tln yuan, up from 3.9tln in 2024 Will adopt more proactive fiscal policy Will continue to implement appropriately loose monetary policy Will issue 1.3tln yuan ultra longterm special treasury bonds in 2025, up for 1tln in 2024 Will allocate 300 Bln yuan from ultralong special treasury bonds to support consumer goods tradein schem (not the 800 bn that was widely touted) Will allocate 200 Bln yuan from ultralong special treasury bonds to support equipment upgrades programme in 2025As I update Chinese equities are mixed, up in Hong Kong but the mainland is down. Moves are not large and could change as I type!
Reserve Bank of Australia Deputy Governor Hauser spoke today, emphasising the risks and uncertainties of the trade war. Hauser said that the Bank currently sees a very slow path ahead for rate cuts but a global growth (lower), and Australian CPI, impact from tariffs are risk factors to this.
Trump delivered his State of the Union address to a joint sitting of Congress. Of interest on the economy, in summary:
wants to make interest payments on car loans tax deductible, only if the cars are made in the US confirmed reciprocal tariffs from April 2Says tariffs will create disturbance, will require a period of adjustmentWants to repeal the Chips ActReiterates 25% tariffs for aluminum, copper, steelBank of Japan (BOJ) Deputy Governor Shinichi Uchida spoke. Uchida reaffirmed his hawkish stance, stating that the central bank will continue raising interest rates if its economic forecasts are met.
FX moves we relatively mild. Early in the session the USD continued to lose a little ground. EUR/USD hit its highest since the first week of December 2024. As the session progressed, and especially when Trump began speaking in Congress the USD drifted back up a little.
USD/JPY tracked a little higher on the day.
This article was written by Eamonn Sheridan at www.forexlive.com. Read More Details
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