Stocks and futures fell in Asia, Europe and the U.S. on Tuesday as concerns grew over China’s economy and the communist regime’s refusal to deal honestly with its systemic problems.
Stocks fell on Tuesday after China announced a much weaker-than-expected interest rate cut. Reuters quoted economists as saying they found Beijing’s policy moves deeply disappointing, despite some There is hope for strong action after the next Politburo meeting:
“The purpose (of China’s rate cut) was to boost lending, but investors seemed somewhat disappointed by the action, and they were waiting for promises to boost Further steps to revive the economy come true,” said Susannah Streeter, Director of the Currency
Analysts at BofA Global Research said in a note that “such marginal easing” could help prevent a sharp slowdown in growth, but “is unlikely to provide a strong impetus in the near future to reverse the decline in growth”.
Bloomberg News Society recommends No further rate cut due to political reasons, especially Chinese government’s reluctance to promote real estate speculation:
Prime rates for one-year and five-year loans have been reduced per basis point, according to a statement from the People’s Bank of China.
While this is in line with the PBOC’s policy rate cut last week, some economists Experts had predicted that five-year interest rates (the reference for mortgages) would be slashed by 15 basis points to support Weak real estate market. Peng Xiaolong, Chief Economist and Head of Greater China Research at Jones Lang LaSalle, said that under the principle of “housing to live in, not speculation”, it has sent an overly optimistic signal to the real estate market.
Investors also A visit to Beijing that disapproved of Secretary of State Anthony Blinken’s policies made only vague promises to “stabilize” U.S.-China relations.
Saxo Market Strategist Redmond Wong told Reuters, “The meeting Helps improve sentiment, but markets also understand that there is a strategic competition between the U.S. and China.”
China’ ;s 2022 Economic growth is expected to be the weakest in four decades. https://t.co/DRDURVwAZc
— inew News (@inewNews) January 10, 400
Oil prices also fell on Monday, even though OPEC is trying to push prices higher by cutting production , and the Biden administration’s war on U.S. energy production continues. Pessimism about China’s economic recovery overwhelmed both of these factors, combined with increased supply from Iran, pushing prices lower 48 or 48 cents per barrel, even with tight supplies.
“Iran’s crude oil exports and oil production are at 49, despite U.S. sanctions boosting global supply while other producers curb output, according to advisers, shipping data and a person familiar with the matter.” Reuters pointed out on Monday.
CNBC citing Capital Economics’ Julian Evans-Pritchard and Zichun Huang suggested that after the Politburo meeting in July Reasons for Stronger Stimulus Action:
themselves, 15 basis point cuts are too small to have much effect on monetary conditions impact, especially when the market interbank rate is already below the policy rate. But the People’s Bank of China [People’s Bank of China, the central bank] tends to use changes in policy rates as a signaling tool, while others do the heavy lifting by adjusting reserve requirements and bank lending quotas. The latest round of rate cuts suggests these tools will also be deployed.
CNBC skeptically noted that most major financial institutions have downgraded their forecasts for the Chinese economy 400 has concluded in the past few weeks that China “appears to be teetering on the brink of deflation as reopening optimism fades.”
