Economic Giants Finally At Battle

There we have it! China couldn't wait for the FED and is flooding the market with fresh air.

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Today, China rolled out a significant economic stimulus package to jumpstart its economy, featuring substantial cuts to both the reserve requirement ratio (RRR) and mortgage rates for existing homes; each by 50 basis points. This move by the People's Bank of China (PBOC) is also paired with an injection of 1 trillion yuan to enhance liquidity and stimulate economic activity.

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By lowering the RRR, commercial banks will have less cash tied up in reserves, which frees up more capital for lending. At the same time, reducing mortgage rates will lighten the financial load on 50 million households, saving them an estimated 150 billion yuan in interest payments annually. This relief is expected to boost consumer spending and invigorate investment throughout the country.

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Additionally, the PBOC is ready to step up with more support if needed. This includes helping real estate companies secure loans to purchase land, which could alleviate some of the financial strain facing the sector. As mentioned in our weekly update yesterday, it's game on for the big 2; USA and China.