China unveils economic measures in effort to promote calm with markets set to re-open

The open in China will be harrowing

Just as the Superbowl kicks off Sunday, Chinese markets will be reopening in a truly epic battle between bulls and bears.

Futures and foreign ETFs point to a decline in the 8-10% range. There are no circuit breaks in the Chinese market so it will be no-holds barred trading.

On the plus side today, China’s central bank said it will supply case to money markets and banks were told to lend more and not call in loans to companies in affected regions. Other changes included suspending night futures trading and a relaxation of asset management rules that would have forced banks to remove guarantees on trillions of dollars of investments.

The PBOC will provide 1.2 trillion yuan via reverse repos.

If anything, the moves may have been less than markets were expecting. The central bank could have lowered rates and the government could have unveiled larger stimulus. Perhaps they will wait for a flush in markets and then deliver in an aim to turn the tide.

As for a first step, watch the reverse repo rate this morning in Beijing. The 7-day rate could be lowered from 2.50%.


Products You May Like

Articles You May Like

Forex Basics for Beginners Part Two. Introduction to MT4 Forex Trading, Tips, tricks, charts & more
US stocks close near session highs. Solid day higher.
Major indices end the day with solid gains and at the highs
No Forex Trading System ?
Successfully Trade Trends in Forex Trading by Adam Khoo

Leave a Reply

Your email address will not be published. Required fields are marked *