China's Central Bank Disappoints Speculators, Doesn't Cut Rates, ECB Says Ditto

From Reuters, January 15:

• PBOC holds medium-term lending rate at 2.5%
• Market watchers expect rate cuts later in the year
• Cut in reserve requirement ratio seen likely

China's central bank left the medium-term policy rate unchanged on Monday, defying market expectations for a cut as a weaker currency limited the scope of monetary easing in the near term to boost the economy.

A slew of recent indicators continued to reflect the country's uneven economic recovery, with a pick-up in exports in December but weak credit growth and persistent deflationary pressure calling for more stimulus measures.

However, a narrowing interest rate margin at commercial banks and a weakening Chinese yuan have limited the room for the People's Bank of China (PBOC) to maneuver, and rate cuts may be postponed until later this year, some market watchers said.

On Monday, PBOC said it was keeping the rate on 995 billion yuan ($138.84 billion) worth of one-year medium-term lending facility (MLF) loans to some financial institutions unchanged at 2.50% from the previous operation....

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Also from Reuters, January 15:

ECB's Nagel says too early to discuss cutting rates...