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The Week at a Glance – Is China preparing the 2008 bazooka?

While this week is relatively quiet from a release perspective, we are getting news from China that monetary policy should be “moderately loose”—the exact same wording used in 2008.
2024-12-09

Morning from Copenhagen.

Geopolitical tensions are increasing this morning, with Al-Assad officially removed as the president of Syria, giving Israel leeway to enter Syria. This adds a geopolitical risk premium to oil and gold, both of which are up significantly this morning.

The most important headline as we approach the new week is the new round of Chinese stimulus, announced around 8:30 AM Copenhagen time. The Politburo has stated that the PBoC’s monetary policy should be “moderately loose,” the exact same wording used in 2008, potentially making this announcement more significant than the headline hockey we saw from Chinese authorities back in October. Hang Seng, copper, and other China-linked assets are rallying significantly this morning, and the rally is far from over if Chinese authorities are getting as serious as they were in 2008.

This week is light on economic data releases, with the primary macro event being the US CPI on Wednesday. Unless inflation surprises massively to either side, last week’s macro narrative will likely prevail: lower yields, higher equities, higher crypto, and a mixed USD. With that said, let’s review the week’s most important releases.

While this week is relatively quiet from a release perspective, we are getting news from China that monetary policy should be “moderately loose”—the exact same wording used in 2008.

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