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Futures Soar On Surprise Chinese Rate Cut
Moments ago, as traditionally is the case, the Chinese central bank caught the world by surprise and cut rates, notably the deposit rate by 25 bps and the lending rate by 40 while allowing banks to offer interest of 1.2 times the benchmark rate.
According to the press release posted moments ago (google translated):
The People's Bank of China decided to cut financial institutions RMB benchmark interest rate loans and deposits with effect from November 22, 2014. The one-year benchmark lending rate down 0.4 percentage points to 5.6%; one-year benchmark deposit rate down 0.25 percentage point to 2.75%, while the combination of market-oriented reforms to promote the interest rate, the upper limit of the floating range of interest rates on deposits of financial institutions by the benchmark deposit 1.1 times the adjusted interest rate is 1.2 times; other grades adjusted accordingly benchmark interest rate loans and deposits, and to make appropriate benchmark interest rate maturities degenerate.
The summary table:
This happens as many analysts had been calling for more easing from China for months to help stabilize the faltering economy, but also happens a day after as Bloomberg reported, "Distressed Debt in China? Ain’t Seen Nothing, DAC Says." Bascially well over a year after promising deleveraging reforms and a lower trendline growth rate, one which would not see incremental monetary stimulus, Xi Jinping threw in the towel and joined Japan and Europe in aggressively pursuing greener pastures.
It also means that, as expected, China is now clearly paying attention to Japan's unprecedented currency destruction and as Albert Edwards noted a few weeks ago, now that China has finally broken the seal, it is only a matter of time before China also devalues its currency outright.
The good news for the liquidity addicts, is that the S&P futures are now 12 points higher on what is clearly the only growth strategy left in a centrally-planned world, and are approaching 2070 and just 30 points away from Goldman's 2015 year end target!
Finally, a quick reaction comment from Diapason's Sean Corrigan who points out a few less obvious features of the PBOC rate cut:
Shibor has been and will remain well inside that corridor for some time to come. Note, too, that the CB is also allowing banks to bid for depo at 1.2 x the new 2.75 floor (i.e., at 3.3%) versus the previous level of 1.1 x 3.0 (i.e., errr -- well, 3.3%, actually)!
Given dysfunctional financing, there has been recent discussion at Leading Group level about trying to unblock the market by relaxing the 75% loan:depo rule -- perhaps by reclassifying non-deposit taking financial institutions as plain depos (which count towards the total) and away from interbank (which do not). That then got some pointing out that this would only unleash even more Reg Arb and even that it might then require a cut in the RRR rate (since the newly-designated depos would now fall under the rule) and so send out a signal the PBOC has been desperately trying to avoid. On top of all this, the recent slew of IPOs and the flood of money into the stock market had tightened up the short-date market again to the extreme of a 322 bp intraday jump in the 7-day rate. This, in turn, prompted a liquidity injection which was all the more needed since banks are supposedly now banned from window-dressing at month end.
The rate cut should therefore probably be seen more as an attempt to prevent blockages in the credit system becoming critical and as a sign that the bank itself is becoming confused, having allowed so many parts to move all at once as part of its 'reform' process.
Initial reaction to the headline has, of course, been a jerk higher (though modest so far) but it is far to early to start screaming 'reflation', not least because the CB itself is using language which very much goes against this whereas, one presumes, were it really wanting to gun the engines again, it would be jawboning a la Draghi for all it was worth.
Then again, all central banks started off jawboning in a calm, cool and collected manner before they all turned into Draghi and Kuroda.
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I'm speechless
Women in Singapore are embracing pole dancing (PHOTOS)
http://hedgeaccordingly.com/2014/11/women-in-singapore-are-embracing-pol...
The global economy dosn't have enough bubbles already ... so let's create more bubbles by lowering interest rates!
Looks moar and moar like that big sink hole in Russia is an omen for the markets!
http://www.zerohedge.com/news/2014-11-20/shocking-pictures-russian-potas...
The answer to every Econ 101 question about monetary policy is "increase the money supply". So goes the old joke. Now happening in real life.
20 years from now the word "Obama" will be considered an obscenity
Preferably history will have forgotten him and his whole sorry presidency.
I burned all my college Econ books in 2010.....fucking University of Douche
Does anyone remember GAAP?
People believe what they want to believe.
Yeah, aren't we all glad that's been replaced by UWFNYW? (Use Whatever Fucking Numbers You Want)
Rolls right off the tongue, doesn't it?
I carry mine in the car and use them as emergency toilet paper.
bbq starter is fine aswell, give a lil burnt flavor, not that disgusting.
Don't be, in this brave new/old world of the Mutual Beneficiary, being more equal than others only goes one way.
What I find funny about all of this-we will hear over and over from the "cheerleaders" that the market is higher because "things are getting better here" Well they have "just been getting better" since their intial 1200 SPX price target 3 years ago.
Now closing in on 2100-we are "still just getting better" and the same song and dance is being cheered by the talking heads. We are here because of a juggling game of central banks-US-ECB (rumor-talk) Japan-China-ECB-Japan China.
None of this has anything to do with economies. But it is what it is. Traders are not believing we can go higher because we are so overbought-valuations don't support it..and they are 100% correct. But when trading, the only thing that matters is price-and that isn't dropping..YET.
There are no real important turn dates, so the low volume levitation higher will most likely continue. But we are seeing some in the not so distant future. Here is a peak at where we are on sentiment. Good luck.
http://www.sentimenttiming.com/free/
Agree with the sentiment, but don't trust anyone who wears a bowtie...
The actual title to this article should read "Futures Soar on Escalation of Currency Wars" Many analysts accurately predicted China having to ease further IN response to Japan's super QE. And here we are. Europe and China were ALREADY feeling the pressure from the weaker JPY.
It's days like today that you have to smile at your PM stack, despite the immediate paper price move, as it's pretty clear to me that everything, macroeconomically is more or less unfolding as the PM bull had long ago expected.
Green means go! We are off to the races!
coming off the highs now, stinks of world Central Bank panicing, whether the market will see it like that is another question, perhaps that was the top?
Excellent point there!
Cause it's a sure sign of how horrible the global economy has become now.
It might help make all the cheap plastic shit from China less expensive at Wally World but it kills the jobs "recovery" in the US
Here comes the implosion!
Then they'll go to selling gold....and that won't work either.
They knocked gold from $1920 to under $1200...but the problem with that is everyone knows $1920 is way undervalued for gold.
http://www.youtube.com/watch?v=GPYLJoq_40Y
Central Banks Coordination
This comes as a suprise ? Bullshit! Everone knows this is how you "fix" things. We are just getting cranked up. DOW 18,000 by Christmas.
All we need is MOAR!
At least they can cut. The West is collapsing into ressesion at ZERO rates. Never before has that happenned but it was always going to as each cycle got lower as debt rose, and rose, and rose
Useless greedy Twats
Gotta keep the ponzi going.
it will.
period.
problem with doomers is they want shtf to come, but they have not a fucking clue of what hard it is from going to " theory & stacking can " to war sound and 5days no sleep to keep familiy protected from outside.
those doomers go sleep every night after movie... pathetic. no one want to have the dirty hands, but evey one want part of the cake.
act accordingly.
Bro, do you even English?
Stabilize the economy...by increasing the "take." I love it. So a high quality borrower will now pay more above what it "costs" the local bank to manufacture the loan out of thin fucking air.
And this is supposed to help. Well sure it'll help alright. Just not people who work for a living, and it certainly won't help anyone who was foolish enough to not be fraudulent about their collateral.
Whatever. LOL
Egg rolls.
Today's panick spikes also about certain option expiry's don't forget !
At current levels, today's Dow / S&P candles both have potential for a huge bearing engulfing set-up
the moar the real eCONoME erodes, the higher the bullshit stock market goes. the ministry of propaganda will not allow the depression to be televised. ...don't cry into your gruel.
The Inflation knee jerk via currency devaluation wars hotten up more, to stop the deflation hemorrhage and kick start local competitive advantage.
http://www.businessinsider.com/draghi-inflation-must-rise-without-delay-...
If the FED puts up its interest rates to control the debt spiral, due to casino carry trades; aka private banksta bubbles; AND State side spending, it will increase this imbalance and make US trade balance even more negative.
FED now in a tight spot. We can see now that three major economies are going for the devaluation strategy to stimulate local economies : EU, China, Japan; whereas two are going the other way to tighten LOOSE money supply: USA and UK.
India is stirring the pot to follow in China/Japan's footsteps and Russia is being hit by oil price slide and sanctions.
Brazil is going belly up as the criminal Petrobras scam hits its star corporate ship just like Mexico does.
So, looks like a lot of BRIC countries are slowing down.
Will the Oil price move by Saudi hold?
It stimulates the creditor economies of China and India. It hurts the oil exporters.
I think as usual, the key players are FED and China and EU now under the deflation gun.
2015 will be an awesome year to understand if this whole thing unwinds or if the Beanstalk of WS climbs moar n moar.
Today's market action in advance....
http://videos.teamwukar.com/video/614600/listen-to-the-sheeple/
from cabaret: the song" the future belongs" sing along the recent actions of a mulatto emperor will have many giving voice.
https://www.youtube.com/watch?v=29Mg6Gfh9Co
repost perhaps those in USA can now understand why the germans became nazi.. a responce to lawlessness of men trying to destroy the german (white in our case) people.
That's funny
If the uber wealthy can get increases on the S&P well in excess of inflation, it makes you wonder why some of these corporations can't pay a decent wage to their workers and instead rely on government to supplement the whole retarded show with food stamps and other handouts.
'cuz that might reduce their bottom line?
You meant their waist line?
Their bottom line does not change because they still have more money than they can count, spend or dream of.
Sad state of affairs when the rich have lost the capacity for higher level thinking and empathy for their fellow human beings.
http://finance.yahoo.com/news/ceos-10-big-mergers-430m-111151714.html
When leftists can vote themselves immunity from laws and free shit - they are going to do it.
A lot of this 'profit' can be mystery meat 'earned' in stock buy backs.
Financials can be a lot like Hollywood actors, they can look good on the outside but they are full of shit.
Listen Select Zero's,
Today market the end of an excellent week of trading on the NSE.
http://www.nseindia.com/live_market/dynaContent/live_watch/equities_stoc...
With KOTAKBANK, BHEL, and ICICIBANK making big moves.
Listen. If you're not trading it, you might want to consider joining our Indian excitement!
Indian excrement you mean.....world's center of legal rape and gang rape.
We have a Cosby for you.
Listen.
Take it easy man. It's a different culture. Relax man. Relax.
Throughout (recent) human history, the (new) way to tackle problems is to . . . create more problems, as the physical and intellectual mobilization to tackle the new issues prevents unnecessary rumination on existing troubles. Modern self-help books describe this strategy as "the power of positive drinking."
Anyone that thinks Santa isn't going to shit all over the worlds poor and laugh at them with DOW 18k are fooling themselves.
On a more serious not i've mentioned before they will pull one BS trick after another out of their asses and absolutely no one knows how far they can go with it. Calls for the death of the market were in full force 10,000 points ago. It's really getting to the point my as well go about your business and forget about because there is no making sense of crazy.
That's because business is good on planet China
http://newworldorderg20.wordpress.com/2014/11/21/finnish-firm-kemira-opens-chemical-plant-in-nanjing-china/
http://newworldorderg20.wordpress.com/2014/11/20/quebec-firm-wants-to-sell-helicopter-engines-to-china-get-in-line-pal/
http://newworldorderg20.wordpress.com/2014/11/21/texas-and-china-talk-trade-cash-in-houston/
http://newworldorderg20.wordpress.com/2014/11/19/los-angeles-signs-medical-tourism-deal-with-south-china/
http://newworldorderg20.wordpress.com/2014/11/19/china-gets-free-ticket-to-buy-australian-real-estate-under-free-trade-deal-everywhere-free-trade-goes-destruction-follows/
http://newworldorderg20.wordpress.com/2014/11/18/chinas-hebei-iron-takes-control-of-swiss-duferco-international-trading-holding/
NOTHING under these stock prices here but pure air, any selling here could be very interesting, no short bids left
Each bailout simply increases the magnitude of the impending correction.
They know more bailouts won't help...yet they do them anyway.
Peak futility.
cutting interest rates b/c the economy is sooo healthy. and now, everything is worth/costs more!
nothing says recovery like being unable to afford housing or healthcare!
Tylers - Goldmans target is 2150, not 2100.
2050 * 1.05 = 2150
Good, let them all devalue their currencies. It will be good for US consumers because it will lead to deflation in the US. It will be bad for US manufacturers because they'll not be able to compete with low priced foriegn goods. Anyway, the US doesn't make anything anymore, we just buy from foriegn manufacturers so what does it matter? The only problem is people in the US won't have jobs because the remaining industries will fold and no matter how cheap goods are if you have no job you can't afford to buy them anyway. But then again we have Obama and the Feds that can print or digitalize unlimited currencies to give to the masses through welfare, obamacare, free education, etc., etc., etc., so they have the currency to spend on all these foreign goods such as apple ipod. The real losers in all these are the foriegn producers because the US digitalized or printed currencies is backed with air and will not be paid back nor be allowed to return to the US. Ha, ha ,ha, the only recourse for all these countries to get paid is to go to war against the US but then again they may not have to since they can now get visas to come and populate the US and spawn all Americans into becoming them. Just look around your neigborhood and tell me how much the demographic has changed from 10 years ago. I bet the population of Mexicans, Chinese and Hindu's (Indian) have multiplied more thn 10 times. So all I can say is, Americans wakeup and start the revolution before it's too late and our beloved US is no longer us. Elections don't matter anymore, even with Republican majority in congress can't do anything to stop the tyrant in chief from declaring his own laws on the people. Even the supreme court will not act and just go along with the tyrant because he got them all by the balls or cunt, just see what happened to Obamacare is a good example. This is how people like Hitler, Stalin, Mao, Castro, etc. have gained power because people has turned to sheeps and are happy to go to pasture when the tyrant sheep dogs (DOJ, Police, etc.) bark.