The Shanghai-Shenzhen CSI 300 Index settled up 4.33% The equivalent move in the DJIA would be over 1800 points. A big move for a high quality index.
From Marc to Market:
Overview: News of China's multifaceted support measures have bolstered risk appetites today. The dollar is mostly softer and only the yen and Swiss franc among the G10 currencies have been unable to find traction against the greenback. Most emerging market currencies are also trading with a firmer bias. China's measures include measures to support the stock and housing markets. The seven-day repo rate was cut by 20 bp (to 1.50%) and reserve requirements were cut by 0.5%.
China's CSI 300 rallied 4.3% and an index of mainland companies that trade in Hong Kong jumped over 5%. It helped spur an equity rally not only in the region, but Europe's Stoxx 600 is up almost 0.6% and US index futures are trading higher. Yields in the Asia Pacific were softer, and the Reserve Bank of Australia's hold seemed a little less hawkish than previously. However, European benchmark 10-year yields are mostly 2-4 bp higher, but the Gilt yield is up six basis points to almost 4%. The 10-year US Treasury yield is four basis points higher near 3.80%. Gold is steady after setting a record high near $2940 today. China's stimulus appeared to lend crude oil support. November WTI is up about 2.5% today and it is pushing above $72 a barrel for the first time since September 3.
Asia Pacific
The sharply lower dollar fix by the PBOC last Friday was an important signal. Yesterday, the PBOC gave the market another signal with a 10 bp cut in the 14-day reverse repo rate. Today, it went big. It cut reserve requirements by 0.50% (freeing up CNY1 trillion or $142 bln) and cut the 7-day repo rate by 20 bp (to 1.5%). The PBOC also announced CNY800 bln support for the stock market (CNY500 bln swap facility and a CNY300 bln re-lending facility. This could later be scaled up, if needed. The central bank also indicated that it was considering a state-backed stabilization fund, which it has used in the past (2015). There were also new measures to support the housing market. The PBOC increased the backstop for local governments buying houses from 60% to 100% and cut the minimum down payment for second home purchases....
....MUCH MORE
