The People's Bank of China announced a 10 basis point cut to the one-year medium term lending facility (MLF) rate from 2.95% to 2.85% and 7 day revers
The People’s Bank of China announced a 10 basis point cut to the one-year medium term lending facility (MLF) rate from 2.95% to 2.85% and 7 day reverse repo open market operation rate from 2.20% to 2.10%. This was the first MLF cut since April of 2020. On Thursday (20 January) this week the Bank will be setting its one- and five-year Loan Prime Rates (LPR). The MLF cut has raised expectations of a cut for an LPR.
Following on from the rate cuts China published Q4 GDP (a beat but down on Q3 and the slowest for 18 months) and December economic activity data (industrial output beat but a retail sales miss … see bullets above).
Coronavirus news from China saw a case detected in Beijing and a subsequent tightening in entry restrictions to the city.
North Korea fired two ballistic missiles from Sunan Airfield in Pyongyang.
Pacific island Tonga was rocked by a huge volcanic eruption over the weekend, a tsunami wave resulted. Reports of damage have been, thankfully, small so far. As I post there has been a further large eruption,
USD/JPY and USD/CHF rose on the session, USD/JPY the stronger. 114.50 held the rally. Elsewhere across major FX ranges have been small with barely any net change for the session. Its a US holiday today, Monday, which will thin out North American forex trade. Stock and bond markets are close (see bullets above for more).
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