⚡ How Will Global Economies React to Potential 100-200bps Rate Cuts?
(Economic Stimulus Insights) // Macro Mornings - ChinaStimulus, GlobalRates, EmergingMarkets, Macro, Finance, Investing
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⚡ This is part of a series designed for those who don't want to miss out on any market news. I cover all the crucial market developments that the community needs to know. Feel free to catch up on previous emails here if you'd like to start from the beginning!
China's Economic Revival
RMB 1 Trillion Liquidity Injection: China’s monetary and fiscal policies will inject RMB 1 trillion in long-term bank capital to support infrastructure and real estate markets.
15.7% Stock Market Rally: The CSI 300 Index surged 15.7% in one week, its best performance since 2008, driven by stimulus announcements, signaling renewed confidence in China's economic outlook.
Property Market Decline Eases: After new home prices saw their sharpest fall in 9 years in August, China’s latest measures aim to halt the property market slide and boost household consumption, potentially adding RMB 150 billion annually to consumer spending.
Global Interest Rate Dynamics
100-200bps of Rate-Cutting Potential: Real interest rates in major economies like China, the U.S., and the Eurozone could drop by 100-200 basis points compared to pre-pandemic levels, offering room for easing.
25bps Rate Cut Expected in South Korea: The Bank of Korea is predicted to lower interest rates by 25bps to 3.25% in October, reflecting weaker export growth and inflation stabilizing at 2.0% YoY.
Fed Eyes 50bps Cut: U.S. interest rates are expected to fall by 50bps at the November 2024 meeting, as inflation eases and the economy shows signs of cooling.
Growth and Inflation in Focus
6.4% Growth in Vietnam: Vietnam's economy is projected to expand by 6.4% in Q3 2024, slightly down from 6.9% in Q2 2024, driven by exports and foreign investments, despite the impact of Typhoon Yagi on agriculture.
Philippines Inflation Drops to 2.6%: Inflation in the Philippines is forecast to decline to 2.6% in September 2024, down from 3.3% in August, thanks to lower rice tariffs and improved food supply.
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Disclosure
This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. This material has been prepared for informational purposes only. Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation.