China’s rate cut failed to lift HSI
China’s rate cuts were not enough to lift investor sentiment in the region. PBoC lowered its one-year medium-term lending facility rate by 10bps to 2.85%. The seven-day reverse repurchase rate was also cut by 10bps to 2.1%. They’re the first rate cut since April 2020.
Also, the PBoC injected more liquidity by offering 700 billion yuan of MLF loans, exceeding the 500 billion yuan maturing, and added 100 billion yuan with seven-day reverse repurchase agreements, more than the 10 billion yuan due.
Hong Kong HSI closed down -165 pts or -0.68% at 24218.03. Downside momentum has been diminishing since mid December. Yet there is no clear sign of bullish reversal. HSI is still inside medium term falling channel. Another fall remains in favor to extend the down trend from 31183.35 through 22665.25 low.
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