PBOC rate cut doesn’t excite

Rather than boost confidence that the economic moderation in China can be reversed, the PBOC interest rate cut yesterday instead reinforced why it happened to begin with, the slowdown is beginning to hurt. This was seen as the Shanghai index closed down .5% after opening higher by .5%. This lame response was the cue for another selloff in copper and crude. Elsewhere in Asia, South Korea kept rates unchanged as expected. Next week central bankers in Indonesia, Thailand, New Zealand and Philippines all meet. In Europe, Spain will may request a bank bailout (EFSF money going to the sovereign and then onto its banks rather than directly) over the weekend, according to comments, with the total amount determined by month end when further estimates of what’s needed are released. While the IMF said the hole is about 40b euros, some think they need 80-100b.

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