RRR cut; Talking up the stock market; Liu Jianchao; Teslas and security; Red Sea
Summary of today’s Essential Eight:
Surprise RRR cut - At a press conference to introduce “the implementation of the Central Economic Work Conference's deployment and the situation of financial services supporting the high-quality development of the real economy” PBoC head Pan Gongsheng announced that the reserve ratio requirement 9RR) will be cut by 0.5 percentage points on February 5th. The move, part of a broader set of measures policymakers are rolling out to stabilize the economy and markets and improve confidence, was surprising for its timing but even more for the fact that Pan announced it himself, and while the markets were open. The timing and way the message was delivered may be important than the actual substance of the cut.
More from the PBoC press conference - Another interesting announcement from that press conference is that PBoC is setting up a “credit market department” to focus on the “five major tasks” Xi laid out at the Central Financial Work Conference last year. …