24 Aug 2015
Behind today's rout in Asia - Deutsche Bank
FXStreet (Bali) - The Macro Strategy Team at Deutsche Bank, elaborates on the main catalysts behind today's rout in the Asian equity markets, with the Shanghai Composite down over 9% at one stage, worst one-day losses since the Asian financial crisis.
Key Quotes
"This morning’s rout in Asia comes after hopes that more government support in China could be around the corner, although the lack of any state intervention first thing this morning is seemingly exaggerating the pain in markets."
"As per the WSJ, the PBoC is set to make another move to cut the RRR, possibly as soon as this week in a bid to flood the Chinese banking system with as much as $106bn in liquidity."
"Meanwhile, a second story doing the rounds is a report that China’s State Council has published a plan allowing for pension funds managed by local governments to invest in the stock markets for the first time."
"According to Reuters, the report suggests that pension funds will be allowed to invest up to 30% of their net assets in stocks, funds and balanced funds having only previously been able to invest in bank deposits and treasuries."
Key Quotes
"This morning’s rout in Asia comes after hopes that more government support in China could be around the corner, although the lack of any state intervention first thing this morning is seemingly exaggerating the pain in markets."
"As per the WSJ, the PBoC is set to make another move to cut the RRR, possibly as soon as this week in a bid to flood the Chinese banking system with as much as $106bn in liquidity."
"Meanwhile, a second story doing the rounds is a report that China’s State Council has published a plan allowing for pension funds managed by local governments to invest in the stock markets for the first time."
"According to Reuters, the report suggests that pension funds will be allowed to invest up to 30% of their net assets in stocks, funds and balanced funds having only previously been able to invest in bank deposits and treasuries."