The China interest rate cuts and modifications to reserve requirements are an attempt to bolster a slowing economy.
The People’s Bank of China said the interest-rate cuts were aimed at reducing borrowing costs for Chinese companies, while the cut to bank-reserve requirements were intended to maintain “ample liquidity” in China’s financial system. We took a deeper look at how this impacted the SP500, $ES_F, earlier in the day.
China lowers interest rates http://www.moneylife.in/article/china-lowers-interest-rates/43189.html … @suchetadalalpic.twitter.com/RxK3hLxaIx
This is the fifth time they have cut rates in recent history according to Bloomberg TV.
China cuts interest rates for a fifth time hoping to stop rout http://bloom.bg/1UaBaqp pic.twitter.com/tHghqKJ2qx
One of the results in US markets is that Treasury yields climbed and we can see $ZB_F futures dipping below 160.
US Treasury yields climb past 2% as markets stage relied rally, China cuts interest rates http://cnb.cx/1NRlJBu pic.twitter.com/jChO8MZbLn
According to CNBC we are already thinking about the impact on the FOMC interest rate decision in September:
The market headwinds seen this week and last week have led investors to reassess their expectations for the timings of a U.S. Federal Reserve interest rate rise. A hike in September—the first in nine years—is now seen as less likely.
As of this posting, the $ES_F held up well overnight gaining approximately 30 handles into the 1930’s. Make sure to check out the Traderfy Trend each morning for a preview of the futures market trends.