Xi Comments Fuel Speculation of China Monetary Easing, Though Restraint Likely

• Xi Jinping cited in book saying China should enrich monetary policy tools, gradually increase central bank buying/selling of government bonds

• Traders speculated line meant China considering quantitative easing, helping fuel stock gains

• But most say not a green light for QE; debate focused on whether PBOC should buy bonds directly from market

• PBOC has opposed aggressive stimulus, pledged to keep “normal” monetary stance

• Despite reluctance, speculation about additional Chinese monetary easing has climbed recently