Until the food inflation* situation plays out the PBOC will remain cautious and deliberate. The bank is aware of the very real risk of deflation so it's a pretty good bet they'll ease, the question is when.
The Shanghai Index closed at 2108.96. The 52-week (and 44 month) low was 2100.25.
China interest rate swaps at 3-month high on delay in easing
China's interest rate swaps(IRS) traded at three-month highs on Monday on tightliquidity and dampened expectations for monetary easing, with traders at a lossto predict when the central bank will cut banks' required reserve ratio (RRR) further. The rate on one-year IRS touched 2.98 percent on Monday morning, its highestsince mid-May, while five-year IRS reached 2.99 percent, the highest since May 25. "There's just no money," said a trader at a city commercial bank in Shanghai
*See Friday's "Food price inflation now visible in China" or Sunday's LA Times: "China worries about social fallout of soybean oil price jump"