The PBOC stepped up cash injections this week, suggesting authorities are trying to shore up financial markets as a selloff in bonds spreads to equities… but it is not working!
As Bloomberg reports, the central bank has already added a net 510 billion yuan ($77 billion) via open-market operations into the financial system this week, matching the third biggest weekly injection this year.
But, it is not enough…
While bonds did stabilize – managing to avoid closing beyind the crucial 4.00% level…
Stocks did not…
As they head of the worst week in 7 months…
And commodities are getting clobbered…
“The increase in cash additions will help soothe market sentiment,” said Qin Han, chief fixed-income analyst at Guotai Junan Securities Co. “But the decline will not be reversed, as the market’s biggest concern is not tight liquidity but tougher financial regulation.”
