Markets and commodities jump as People’s Bank of China cuts rates
Happy Friday.
European markets and embattled commodities all jumped this afternoon after the Chinese central bank cut rates, unleashing further stimulus on its economy.
The People's Bank of China (PBoC to its friends) cut its one-year deposit and lending rates by 0.25 percentage points each, while it cut its reserve requirement ratio by 0.5 percentage points.
The news caused European markets to jump, with the FTSE 100 rising 1.36 per cent in lunchtime trading. Meanwhile, the Dax and Cac – both still high off hints from the European Central Bank that further stimulus is on its way – were up 2.8 per cent and 2.4 per cent respectively.
On the FTSE, miners leaped to the top of the pile, with Glencore jumping 6.4 per cent, while Fresnillo jumped 4.5 per cent and Anglo American rose 3.5 per cent.
Commodities, which have taken a beating from a slowdown in Chinese growth, also rallied, with Brent crude and WTI crude oil both jumping, by 0.9 and 0.6 per cent respectively.
A spokesperson for PBoC said there was still downward pressure on China's economic growth, and emphasised the need to continue using monetary policy tools to "strengthen" its position.
"At present, the domestic and international situation is still complex."