Beijing's Efforts to Calm Their Market


Even though China decided to ease policy for the 6th time since November, investors remain fearful. While looking at the erased rally on Wall Street that was fueled by Beijing's decision we can state that risk-on is still in play. Also the uncertainty over whether Fed will raise interest rates this year remains.Even though the People's Bank of China decided to cut interest rates on Tuesday and lowered the amount of reserves that banks must hold, we had very volatile session, CSI300 was up almost 2%, and Shanghai Composite up 0.8%. MSCI is still close to multi-year lows. Nikkei and ASX surprised positively, gained respectively 1.4% and 0.5%.

Source: Bloomberg
Some disturbing signals from major companies apperaed, for example mining giant BHP Billiton lowered the expectations for demand from China. The 'fear index', VIX still remains elevated at 36, however was up to to the highest level since January 2009 on Monday.