China's Sudden Interest Rate Increase Influence the International Market
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China rate hike by the effects of gold and other commodity prices of oil, the major indexes in Europe and America were opened higher in early trading, the dollar index again weak. Analysts generally agreed that the Federal Reserve central bank will choose to raise interest rates again before the quantitative easing, indicating that the monetary authorities focus more on negative interest rates and excess liquidity to solve the problem. But whether this is to enter China's rate hike cycle, economists have mixed views.
After the steady rise of the market fright
China has experienced a sudden increase due on the 19th the news of the impact of interest rate Pudie the international market, 20 from the "shock" in the pressure of cross God, gold and other commodity prices of oil, the main stock index opened higher in early trading. Market, economic growth in China was originally panic affected by interest rates, after a day of sell into the market to understand that a new round of quantitative easing in the implementation of the Federal Reserve will soon be expected, the upcoming rate hike in China will not change the fundamental demand for commodities .
20, the stock market like Europe and America from the "China rate hike," out of panic. U.S. stocks open higher, Europe, UK, Germany, France, the three major stock markets were slightly higher intraday.
20 international gold futures prices in early trading, slightly higher open as of press time, an increase of 0.5 percent. 20-day international oil prices in Asian markets back above 80 dollars a barrel, Reuters, China rate hike of this antecedent caused the decline is too large.
The People's Bank of China unexpectedly announced the evening of 19 interest rate 25 basis points, triggering a global market or the sound, and "mass destruction" amazing. This means that the international market, China will control the speed of economic growth. The Dow Jones index fell 1.48%. International oil prices fell sharply in New York crude oil futures prices closed at $ 79.49 a barrel, down 4.3%, the highest since February the biggest single-day decline. International price of gold also hit a record in July since the maximum daily decline. London Metal Exchange (L ME) 19, base metals futures prices Pudie.
But analysts said the market overreacted, in view of the U.S. Federal Reserve will be announced as early as next month session to ease monetary policy further, this means that the world has not ended the era of excess liquidity, weakening dollar will Chengya, commodity by still difficult to heat less sought after.
Prior to the proliferation of global liquidity due to oil and gold, represented by a continuous strong commodity for 6 weeks, this year the price of gold is steadily increased since the global economic recovery approach, "four thousand" times.
Barclays Capital analysts said, 19 commodity markets fell across the board is a surprise rate hike in China's knee-jerk reaction, and now investors are beginning to calm down and analyze interest rate on the true meaning of China's economic growth, and that the rate hike in China the actual impact of economic growth is limited, will not fundamentally change the demand for crude oil.
The day before the sudden drop in commodity prices, market interest rates in the message that China is only rational motivation callback, but will not reverse the long-term U.S. dollar weakness is expected to be under the strong trend in commodity prices. Sander Capital analyst said: "As commodity prices have been continuously strong demand factors in China for 6 weeks before the issue even in the bad news, but also what products can keep up." LOG IC A dvisors the Bill O'N eill said the gold market should callback, the Chinese rate hike and Geithner's speech to provide a motivation to sell gold.
China's foreign exchange market has also been implicated in a huge rate hike. Risk aversion pushed the dollar higher, while the central parity of RMB against the dollar there was a substantial drop. China Foreign Exchange Trade Center data show that, 20 yuan central parity rate against the U.S. dollar reported 6.6754, sharply lower than the 201 basis points the previous session. Against the euro, a significant increase in median price £ 1,200 basis points or more. The stronger dollar. However, there are 20 dollars return to the "normal" weak trend. 20 early New York trading the dollar weakened across the board as investors no longer interest rate hike in China to global economic growth as a negative message. Early electronic trading, one euro against 1.3866 U.S. dollars, 19 $ 1.3730 late in; 1 U.S. dollar 81.24 yen, 81.58 yen late in the 19th; U.S. dollar index was at 7 7.6 1 5 , on the 19th late in 78.218. |
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By :
Jessie Stone
Submitted
2010-10-21 16:38:30 |
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