Credit Agricole: China targets for economic expansion

Quotes from Credit Agricole

• The growth target for 2015 has been cut to "around 7%".
• We believe that Beijing will achieve this less ambitious goal. 
  
  
• Plans to allow the RMB "to float more freely" will likely be expressed via higher volatility of USD/CNY fixing rather than band widening. We recommend long USD/CNH positions. 
  
  
• The higher government budget-deficit target, 2.3% of GDP, may lead to wider bond-swap spreads.  
  
  
• Fiscal easing takes the pressure off the PBoC; however, the CPI objective has not been lowered much and remains high at 3.0%. 
  
  
• This leaves room for more monetary easing, although we expect RRR cuts rather than policy-rate reductions. We recommend receiving 1Y CNY IRS and ND IRS.