China Rate Cut Reaction the Latest Sign Beijing Has More to Do
- PBOC cut rates on medium and short-term loans to aid growth
- Yuan sinks to lowest since November amid weak sentiment
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China traders are rushing to the safest assets the market has to offer, as a surprise interest-rate cut failed to repair confidence damaged by ongoing economic weakness.
The benchmark government bond yield dropped to a three-year low, while the yuan and local stocks sank in tandem, as disappointing economic data followed quickly on the heels of the People’s Bank of China’s unexpected move. That’s a sign of worsening sentiment toward Chinese assets and a market begging for more stimulus to rejuvenate growth.