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Weekly preview - state control battles market forces
China's policymakers will be hurting after the chaos seen last week. There are certainly important grounds for fear and the yuan is likely to weaken further over the medium term. In the very short term, however, there will be re-doubled efforts to regain control, especially as it will be crucial to offer domestic reassurance. There is, therefore, likely to be aggressive intervention to support the equity market and aggressive action to support the yuan. Saudi Arabia will also be looking to intervene aggressively to protect the riyal. On a very short-term view, there will be value in buying risk assets as central ... (full story)