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Hardy: Market churns as China chops rates

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China’s central bank cut its benchmark lending rate and reserve requirements for banks on Friday, boosting the appetite for risk in the market, says Saxo Bank’s John Hardy.

Coming just a day after the ECB’s Mario Draghi moved markets with hints of further QE, Hardy looks at the market reaction to the rate cuts which are aimed at propping up a slowing Chinese economy.

According to the People’s Bank of China, the one-year lending rate will drop to 4.35 percent from 4.6 percent effective Saturday. The one-year deposit rate will fall to 1.5 percent from 1.75 percent.

Hardy says the move supports Saxo Bank’s bullish call on emerging markets and explains how he is trading the event.