Another RRR cut by PBoC likely in Q4

China's industrial production data for October released today shows marginal fall in compare to the previous month. The figure stood at 5.6% in October was 5.7% in September. Retail sales, in contrast, posted slightly firmer number of 11% in the same month.

Overall, given the moderate trade numbers on the weekend, the picture remains of continued sluggish growth. 

There are few signs of a turnaround as yet but merely stabilization in growth at best. Due to ongoing deflation in producer prices and benign consumer prices, for further monetary easing is foreseen, that is probably another RRR cut in Q4 and interest rate cut in Q1 2016, says Commerzbank. 

USD-CNY  is hovering around 6.3630 after the data. A continued steady CNY or relatively strong CNY against its major trading partners could place a greater emphasise the domestic levers to support growth, that is further monetary and targeted fiscal stimulus, added Commerzbank.