Analysts at UOB Group in its Quarterly Global Outlook believe that China's central bank (PBoC) will ease further its monetary conditions in the next months.

• “The PBoC announced its third cut to banks' reserve requirement ratio (RRR) this year in Sep, encompassing both broad and targeted cuts. Further out, we believe there is room for one more RRR cut in 4Q19.
• The PBoC has also revamped the Loan Prime Rate (LPR) which will replace the 1Y Lending Rate to price new loans going forward. The LPR which is pegged to the 1Y Medium-term Lending Facility (MLF) is expected to fall with PBoC potentially looking at directly lowering of borrowing costs through an easing in the MLF rate.
• We see the likelihood for 1Y MLF to be cut by 25 bps and by more should the US-China trade tensions escalate further. From 4.25% (as of 20 August), we expect the LPR fixing to move lower to 3.90% by end-4Q19 and to 3.65% by end-1Q20”.