Yes, you read that right – China stimulus.
Ryan had the headline here: PBOC pumping 500bn yuan through SLF to top 5 banks
Adam with more, here: US dollar slumps after China primes the pump
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The impact, well you can see that in the charts on your screen …. a big jump in currencies against the USD, especially the AUD, NZD, CAD, GBP … et al. Oil, stocks, too. (Speculation as to more dovishness from the Federal Reserve didn’t harm either).
Via Sina.com reports:
- China is providing 500 billion yuan ($81.4 billion) of liquidity to the country’s five biggest banks
- The People’s Bank of China yesterday started providing the banks with 100 billion yuan each through standing lending-facilities with tenor of three months
- PBOC will complete the process today
- “This is like ‘printing money’ as base money is created,” Shen Jian-guang, Hong Kong-based chief Asia economist at Mizuho Securities Asia Ltd., said in an e-mail. “The immediate impact is similar to an RRR cut of 50 basis points to all banks.” RRR is banks’ required reserve ratio; cutting it increases the amount they have available to lend.
AUD impact, for example:
