Morgan Stanley warns on other markets downside risk from China property sector instability | Forexlive

Goldman Sachs were out with a note on China’s property dangers earlier this week:

Via a Morgan Stanley outlook report along similar lines. Analysts caution that if monetary easing measures fail to support the ailing sector, it will also lead to concerns of a spillover effect in the rest of the Asia-Pacific region:

• downside risk would be if China’s property sector does not stabilize even with the easing we expect
• In that scenario, confidence and financial conditions will tighten in China, which will have direct implications for China’s growth but also will negatively spill over to the region

The People’s Bank of China cut rates on two separate policy instruments on Tuesday and are expected to cut the MLF rate tomorrow: