The People's Bank of China came out with a surprise round of economic stimulus late Tuesday, lending $31 billion to financial institutions via its medium-term lending facility. According to Saxo bank fixed income specialist Althea Spinozzi, the Chinese central bank said that it will back the Chinese economy via whatever tools it deems necessary as the Sino-US trade war deepens with new tariff threats from President Trump.

Saxo Bank Head of Equity Strategy Peter Garnry reports that the cash injection saw equities rise in the mainland with the benchmark Shanghai Composite gaining 0.27% after days of losses.

"Emerging market stocks remain only 5% north of an official bear market and we expect the pain to continue as the US Federal Reserve continues along its path of policy normalisation," says Garnry.

Saxo Head of FX Strategy John Hardy is watching US yields where the recent dip does not appear to have held; Hardy is keeping an eye on the Swiss franc and Japanese yen as potential beneficiaries of a renewed rise in US yields.

Enlarge
Source: Saxo Bank

In the commodities space, oil remains in contention ahead of the Opec summit in Vienna. According to Saxo commodities head Ole Hansen, Iran remains staunchly opposed to any rise in production while Russia seeks an increase of 1.5 million barrels/day.

"We see production rising by 300-600,000 b/d irrespective of Iran's wishes," says Hansen.

In the agricultural space, Hansen tells us that the grains sector looks set to stabilise after a four-day decline on trade war fears. Soybeans, he adds, have proven one of the incipient conflict's biggest casualties as half of US farmers' production goes to China.

In single stocks, Garnry says that Oracle's latest earnings release showed an EPS miss while Starbucks's fell short on revenue. On the data front, today sees the UK holding a key vote on Brexit that could see Parliament gaining a bigger say in the proceedings should a 'hard' or 'disorderly' Brexit scenario emerge.

You can access both of our platforms from a single Saxo account.

Disclaimer

Saxo Capital Markets (Australia) Pty Ltd prepares and distributes information/research produced within the Saxo Bank Group for informational purposes only. In addition to the disclaimer below, if any general advice is provided, such advice does not take into account your individual objectives, financial situation or needs. You should consider the appropriateness of trading any financial instrument as trading can result in losses that exceed your initial investment. Please refer to our Analysis Disclaimer, and our Combined Financial Services Guide and Product Disclosure Statement. All legal documentation and disclaimers can be found at https://www.home.saxo/en-au/legal/.

The Saxo Bank Group entities each provide execution-only service. Access and use of Saxo News & Research and any Saxo Bank Group website are subject to (i) the Terms of Use; (ii) the full Disclaimer; and (iii) the Risk Warning in addition (where relevant) to the terms governing the use of the website of a member of the Saxo Bank Group.

Saxo News & Research is provided for informational purposes, does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. No Saxo Bank Group entity shall be liable for any losses that you may sustain as a result of any investment decision made in reliance on information on Saxo News & Research.

To the extent that any content is construed as investment research, such content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication.

Please read our disclaimers:
- Full Disclaimer (https://www.home.saxo/en-au/legal/disclaimer/saxo-disclaimer)
- Analysis Disclaimer (https://www.home.saxo/en-au/legal/analysis-disclaimer/saxo-analysis-disclaimer)
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)