Charting the Markets: Muted Moves as China Takes it Easy
China optimism fades from European stocks, the Aussie dollar outperforms and the U.S. dollar drops.
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Easy does it.... Late on Friday China's central bank announced it would cut benchmark interest rates — that's the sixth interest-rate cut since November. It also lowered the amount of deposits banks must hold as reserves. Just the day before, European Central Bank President Mario Draghi gave a clear signal to the markets that the ECB was ready to step up stimulus. The move sent global stocks soaring and the euro plummeting. And with the Bank of Japan to hold its one-day policy meeting this Friday, investors are betting it will be under pressure to match the ECB's dovish rhetoric.
But while investors applauded Draghi, the market reaction to the PBOC's measures has been more muted.