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.
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