The Chinese central bank poured 800 billion yuan into the market in order to bolster stock prices, which resulted in a rise in both the Asian markets and the European futures markets.
According to the People’s Bank of China (PBOC), China’s central bank has launched a series of stimulus measures that have caused Asian stock markets to rise and are anticipated to boost European markets.
In order to facilitate the purchase of stocks by broking firms, the People’s Bank of China (PBOC) intends to infuse a minimum of 800 billion yuan, which is equivalent to 114 billion dollars, into the stock market.
These are a part of the measures that are being made to prevent the continuous slide in equity prices and to resuscitate the economy.
Additionally, European futures are also responding, with contracts for the Euro Stoxx 50 increasing by 0.5%. There is a good chance that the MSCI Asia Pacific index will achieve its fourth consecutive daily increase.
The most important benchmarks in Hong Kong have increased by at least 4%, while the onshore Chinese indices have increased by more than 3%. Gold has reached a new high at the same time as Asian currencies are gaining strength in comparison to the dollar.
The People’s Bank of China (PBOC) has also decreased the cost of borrowing money on mortgages of up to $5.3 trillion and lowered a key short-term interest rate.
Despite this, there are still worries over the long-term economic health of China, particularly in light of the many deflationary forces involved.
Despite the fact that these measures bring respite in the near term, analysts caution that the bounce may not continue until underlying structural flaws are addressed.
Following the S&P 500’s 0.3% increase, which brought it closer to the all-time high from the previous week, US stock futures remained virtually unchanged.
The yield on two-year Treasuries has remained unchanged at 3.59% due to the fact that traders are banking on more rate reduction before the end of the year.
Despite the fact that the statistics released on Monday indicated that economic activity in the United States expanded at a slower clip in the beginning of September, the fact that expectations have been weakening and prices have been increasing suggests that the economy may still have a soft landing.
Investors are now waiting for the preferred inflation index of the Federal Reserve as well as data on consumer expenditure, which is expected to be released later this week.
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