PBOC cuts reserve requirement rate

European indices and US index futures jumped slightly in the early afternoon after the People's Bank of China announced a rate cut. Reserve requirement rate was cut by 100 basis points to 8.00%. Rate will apply to Forex deposits starting from May 15, 2022. The move will free up some capital for Chinese banks in an attempt to support an economy that is experiencing a deteriorating pandemic situation and new lockdowns.

Market move was quick with DE30 jumping around 0.5%, or 70 points in a matter of a few minutes. However, this did not last long and the move has been almost fully erased by now.

DE30, m15 interval. Source: xStation5