9:27 AM · 9 December 2024

Chart of the day: CHN.cash (09.12.2024)

Chinese stocks and the yuan gained dynamically in the last hour of trading as the country's top leaders vowed to ease monetary policy and said they would take steps to boost domestic consumption.

The Politburo, made up of 24 top officials from the ruling Communist Party and led by President Xi Jinping, announced that it would adopt a “moderately loose” strategy for conducting monetary policy (unseen since 2011) next year.

What exactly will the changes involve? Here are the main points mentioned by Politburo:

- Fiscal policy will be more proactive next year

- A change in monetary policy stance for the first time since 2021.

- Fiscal policy will be more proactive

- Strong increase in consumption

- Stabilization of the real estate and stock markets

The historic shift will see monetary conditions take on the character last seen during the 2008-2009 GFC. Source: Bloomberg Financial LP

European stocks that have exposure to China could see a big jump in volatility on Monday. These include BHP, Rio Tinto, Anglo American, LVMH, L'Oreal, Kering, Richemont and Hermes, Mercedes, BMW, Volkswagen and Porsche, Prudential, HSBC and Standard Chartered.

The CHN.cash index is already gaining more than 4% and has broken out to levels not seen since November of this year. Source: xStation 

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