China's State Council has announced a bunch of new policies aiming to boost domestic demand

  • a tax cut targeting research spending
  • bonds for infrastructure investment
  • "More proactive" fiscal policy, better coordinated with financial policy

The measures were announced during the afternoon in China on Monday

These add to the efforts already launched on monetary policy. The People's Bank of China has cut its reserve ratios (RRR) 3 times already this year, and just yesterday we got an MLF fund injection. These usually occur when existing funding arrangements mature but yesterday's came out of the blue

  • 502 billion yuan of Medium-Term Lending Facility credit
  • one-year maturity
  • Loans to major banks
  • This is the largest such operation since the MLF was introduced in 2014

Stay tuned for the mid rate setting today (onshore yuan), yesterday's broke a seven day losing streak for the CNY.


China is taking measures to combat the trade war threats to its economy.