China Watch: Government Feels Less Urgency in Monetary Easing China's latest set of economic data showed some positive signs in the growth outlook. 3Q12 GDP expanded +7.4% from the same period last year and +2.2% from the previous quarter. Premier Wen Jiabao indicated that 'growth has started to stabilize amid positive changes in the third quarter', signaling a bottom might have been seen in the last quarter. Other data such as retail sales, industrial production and fixed asset investment also showed acceleration in growth in September. In our opinion, the improvement in Chinese economic data should delay the next round of monetary easing as policymakers would prefer to take a “wait-and-see” mode and gauge the impacts of previous reverse repos operations. Read more... BOE Minutes Unveiled Divided Opinions On Asset Purchases The October BOE minutes indicated that the 9 members voted unanimously to leave the Bank rate unchanged at 0.5% and the asset purchase program at 375B pound at the meeting. The minutes also unveiled that policymakers were divided regarding whether asset purchases should be extended after its completion by the MPC meeting in November. Members were also split on the effectiveness of the program on the country's economy. Therefore, the month's minutes omitted the language that policymakers 'felt that additional stimulus was more likely than not to be needed'. Read more... RBA Explains Reasons For October's Rate Cut The RBA minutes for the October unveiled reasons for the surprising rate cut of -25 bps. The decline in bulk commodity prices, slowdown in the job market, persistent strength in Australian dollar and weakening domestic growth outlook were key factors leading to the rate cut earlier in the month. Overall, the RBA saw easing in the growth outlook and the minutes was dovish. The chance of further rate cuts later this year cannot be ruled out. Read more... | 
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