Market comment | China takes measure to stabilize markets

Chinese markets fell sharply after the long holidays, leading the Chinese authorities to boost market liquidity to cushion the impact. The European and U.S. equity markets recovered today, lead also by the rebound in the U.S. manufacturing sector. However, implied volatility remained relatively high, signaling caution.

Key points

• Key points:
• PBOC injected 1.2 trillion RMB ($173.8 bn) in liquidity into the banking system, and cut the borrowing rate by 10 bps.
• Strong rebound in ISM manufacturing in the U.S.
• Concerns about Brexit weighed on GBP.
• Brent prices declined below $56 per barrel.

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