Arab Press

بالشعب و للشعب
Saturday, Jul 12, 2025

Central banks breathe life into markets

Central banks breathe life into markets

Trade of the Day: Stocks, futures in broad relief rally on stimulus hopes; US Treasury yields plummet as rate cut eyed.Financial markets roared back to life on Monday on intervention expectations from the central banks of the world’s three biggest economies, giving investors hope. Bank of Japan (BoJ), joined the US Federal Reserve and the People’s Bank of China in promising economic support to offset the financial damage from the coronavirus. The Bank of Japan said it will “closely monitor future developments, and will strive to provide ample liquidity and ensure stability in financial markets through appropriate market operations and asset purchases.”

That fueled a rally in markets starting with Japan’s Nikkei 225 index, which rose 0.95%, while the CSI 300 index surged 3.29% and the Hang Seng Index climbed 0.62%. The MSCI Asia Pacific ex-Japan index added 0.92%.

“We suspect that the BoJ’s response to the coronavirus will mostly consist of liquidity provision to banks and a renewed acceleration of its ETF purchases. We are not forecasting a cut in the bank’s short-term policy rate,” said Capital Economics in a report.

This added to the optimism sparked by the US central bank, which said it would “use our tools and act as appropriate to support the economy.”

China’s central bank said small- and medium-sized businesses nationwide with principal or interest due between January 25 and June 30 can delay repaying their debt without attracting penalties.

This followed a record low reading of the Caixin to 40.3 for February, the lowest level since the survey began in 2004, falling steeply from January’s 51.1 and missing the analyst forecast of 45.7.

“Production halts and severe staff shortages had contributed to intense capacity pressures during February, as signaled by the fastest rate of backlog accumulation for almost 15 years,” said Bernard Aw, principal economist at IHS Markit. “The timing as to when the coronavirus-related restrictions will be relaxed is critical to restoring China’s manufacturing productive capacity – and therefore engendering a recovery.”

But he predicted a recovery next month.

“Nevertheless, the current situation is expected to improve as soon as in March with an increasing number of manufacturing enterprises resuming work.”

The futures on the S&P 500 Index rose 0.7% and Nasdaq 100 Index futures jumped 0.9%, but European stocks were down with the Stoxx Europe 600 falling 0.2% as investors worried about the spread of the virus in Italy, Spain, Germany and France.

The IHS Markit US Manufacturing PMI fell to 50.7 in February from 51.9 in January, but analysts saw some signs of improvement.

“As expected, the release highlights supply-chain disruptions due to the impact of the coronavirus in China, but interestingly the survey indicated stronger optimism in future production. Whether this optimism will manifest into future output will likely be dependent on the spread of the virus and its impact on supply and demand,” said Rob Mangrelli, director at Chatham Financial.

“Markets have already priced in an accelerated pace of Fed rate cuts over the last two weeks and will continue to assess the impact of the virus along with the potential monetary policy response as additional tier 1 economic data such as services PMI and nonfarm payrolls are released later this week.”

Newsletter

Related Articles

Arab Press
0:00
0:00
Close
Kurdistan Workers Party Takes Symbolic Step Towards Peace in Northern Iraq
BRICS Expands Membership with Indonesia and Ten New Partner Countries
Elon Musk Founds a Party Following a Poll on X: "You Wanted It – You Got It!"
AI Raises Alarms Over Long-Term Job Security
Russia Formally Recognizes Taliban Government in Afghanistan
Saudi Arabia Maintains Ties with Iran Despite Israel Conflict
Mediators Edge Closer to Israel-Hamas Ceasefire Agreement
Germany Seeks Taliban Deal to Deport Afghan Migrants
Emirates Airline Expands Market Share with New $20 Million Campaign
Robots Compete in Football Tournament in China Amid Injuries
China Unveils Miniature Insect-Like Surveillance Drone
Marc Marquez Claims Victory at Dutch Grand Prix Amidst Family Misfortune
Iran Executes Alleged Israeli Spies and Arrests Hundreds Amid Post-War Crackdown
Trump Asserts Readiness for Further Strikes on Iran Amid Nuclear Tensions
Qatar Airways Clears Backlog of Passengers Following Missile Threats
Iran's Parliament Votes to Suspend Cooperation with Nuclear Watchdog
Trump Announces Upcoming US-Iran Meeting Amid Controversial Airstrikes
Trump Moves to Reshape Middle East Following Israel-Iran Conflict
NATO Leaders Endorse Plan for Increased Defence Spending
U.S. Crude Oil Prices Drop Below $65 Amid Market Volatility
“You Have 12 Hours to Flee”: Israeli Threat Campaign Targets Surviving Iranian Officials
Oman Set to Introduce Personal Income Tax, First in Gulf
Germany and Italy Under Pressure to Repatriate $245bn of Gold from US Vaults
Trump Praises Iran’s ‘Very Weak’ Response After U.S. Strikes and Presses Israel to Pursue Peace
WATCH: Israeli forces show the aftermath of a massive airstrike at Iran's Isfahan nuclear site
We have new information and breaking details to share about what is shaping up to be a historic air campaign tonight
Six Massive Bombs Dropped on Fordow; Trump: 'A Historic Moment for the U.S., Israel, and the World'
Fordow: Deeply Buried Iranian Enrichment Site in U.S.–Israel Crosshairs
United States Conducts Precision Strikes on Iran’s Nuclear Sites
US strikes Iran nuclear sites, Trump says
Pakistan to nominate Trump for Nobel Peace Prize.
Israel Confirms Assassination of Quds Force Commander in Tehran
16 Billion Login Credentials Leaked in Unprecedented Cybersecurity Breach
Senate hearing on who was 'really running' Biden White House kicks off
G7 Leaders Fail to Reach Consensus on Key Global Issues
Mass exodus in Tehran as millions try to flee following Trump’s evacuation order
Iranian Military Officers Reportedly Seek Contact with Reza Pahlavi, Signal Intent to Defect
China's Iranian Oil Imports Face Disruption Amid Escalating Middle East Tensions
Trump Demands Iran's Unconditional Surrender Amid Escalating Conflict
Israeli Airstrike Targets Iranian State TV in Central Tehran
President Trump is leaving the G7 summit early and has ordered the National Security Council to the Situation Room
Netanyahu Signals Potential Regime Change in Iran
Analysts Warn Iran May Resort to Unconventional Warfare
Iranian Regime Faces Existential Threat Amid Conflict
Energy Infrastructure Becomes War Zone in Middle East
Iran Conducts Ballistic Missile Launches Amid Heightened Tensions with Israel
Iran Signals Openness to Nuclear Negotiations Amid Ongoing Regional Tensions
Shock Within Iran’s Leadership: Khamenei’s Failed Plan to Launch 1,000 Missiles Against Israel
UK Deploys Jets to Middle East Amid Rising Tensions
Exiled Iranian Prince Reza Pahlavi Urges Overthrow of Khamenei Regime
×