China ease again with both rates and banks reserve ratio

A just reported 6.9% is higher then forecast of 6.8%.  However is under overall yearly target of 7%.  China decisively cut its rate again for both benchmark interest rate and bank reserve ratio. 

It isn’t a bad news but we advise to closely monitor the signal of show hand.  We believe still another 2 to 3 years ahead.  If US is not able to raise its rate with China continue to weaken and it’s internal demand fail to stimulate the grow rate. A sizable recession may really come globally. 

In short term, KLCI will be stimulated further with this news as China is Malaysia largest trade partner now.

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