Early Friday morning Australian time saw coordinated easing from three of the World’s largest central banks. Firstly, the Bank of England raised their asset purchase target from GBP325 billion to GBP375 billion. Then the People’s Bank of China cut the one-year lending rate by 0.31 per cent to 6.0 per cent and the one-year deposit rate by 0.25 per cent to 3.0 per cent. China’s June Quarter GDP data is due out this Friday 13 July. Finally, the European Central Bank cut its main rate by 0.25 per cent to a record low 0.75 per cent.
ECB President Mario Draghi told reporters risk to the outlook remain “on the downside”. The European Union is China’s largest export market. At some stage this slowdown will weigh on China’s exports, which account for 40% of its GDP.
I saw a report that the Chinese Govt is buying gold to stablise their banking system
Hi Roger, here’s a bit of doom and gloom from Ambrose Evans-Pritchard:
http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100018475/china-heads-for-a-deflationary-shock/
Kelvin
Dear Roger
If China’s exports equate to 40% of its GDP and they have about 50% of GDP invested in the resource industries, all in trouble I might suggest but hard on the heels is their finance sector – I cant get a proper grip on the Chinese – I am suggesting they are telling porkies.
You could forgive the poor old ASX investors for being weary and why would you involve yourself in the investing stock market game.
As I have said before there is a danger in going in blind or having the wrong information – Keep watching China data folks.