SHANGHAI, Oct. 26 (SMM) – The People's Bank of China (PBOC) announced to cut the country's benchmark lending rate by 0.25 percentage point to 4.35% on October 23. The PBOC also cut the reserve requirement ratio (RRR) for all banks by 0.5 percentage point to 17.5%, with an extra 0.5 percentage point reduction for some lenders.
Last Friday, base metals posted a quick rise during European and US trading hours after the PBOC’s cut news. But later, base metal prices fell back.
More pressures were piled up for China government to fight with industrial deflation. China’s CPI rose 1.6% in September and industrial deflation has been persisting for 41 months, boosting the case for the PBOC’s interest rate cut.
The result of US Fed’s October interest rate meeting will be announced on October 29, Beijing time and markets expect the rate to be unchanged. But investors are eager to seek clues whether US Fed will raise interest rate in September from the policy meeting. On the same day, US GDP number will be released. Then US dollar index should fall back.
The ECB gave hits of further easing its already extraordinarily loose monetary last week and this focus more eyes on the ECB’s movement in December
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