Asian Markets Mixed as the PBOC cuts Rates

The Asian and Pacific Rim financial markets are mixed as they enter the afternoon on Monday. This morning the Peoples’ Bank of China (PBOC), their central bank, cut their benchmark lending rate to support their economy damaged by the Covid-19 (coronavirus) pandemic.

In Japan, the Asian benchmark, the Nikkei 225, was down over one percent as the broader Topix index, in Tokyo, was down 0.56 percent.

Across the Korean Strait, the Kospi composite index was down 0.17 percent and elsewhere in the Asian and Pacific Rim, the Australian ASX 200 was down 1.45 percent.

In Hong Kong, shares fell a quarter of a percent on the Hang Seng index and on the mainland, in China, the Shanghai composite was down a fraction of a percent and the smaller Shenzhen composite was up 0.26 percent.

Asian Traders Digest a Rate cut from the PBOC

The world’s second largest economy has started to reopen after closing to fight the spread of the Covid-19 contagion. China’s economy was hit hard by the contagion. Their economy contracted in the first quarter and Beijing is looking to boost economic activity.

The Peoples’ Bank of China, earlier on Monday, cut its headline one year loan prime rate from 4.05 percent to 3.85 percent. Their five year loan prime rate was cut from 4.75 to 4.65 percent.

This is China’s second rate cut in 2020.

Traders watch U.S. Political Drama

U.S. state governors sparred with President Donald Trump after the president said that states had enough coronavirus test kits. President Trump also said that they should move quickly to reopen their economies.

Trump sparked controversy as he has urged protestors to take to the streets to “liberate” their states and force state governments to reverse stay at home orders. He has been warned by the attorney general that these tweets could be illegal.

Traders Hope for further U.S. Stimulus Measures

The Democrats and the Republicans are reportedly close to an agreement that would approve extra money to help small businesses hurt by the contagion. Traders are looking for the agreement to be signed on Monday despite the president’s promise to have it done on over the weekend.

The United Kingdom has no plans to lift their lockdown after almost four weeks as they are “deeply worried” about the spike in deaths. This is according to a senior Member of Parliament who spoke on Sunday