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European markets opened up on the rise as China unveiled its economic stimulus package

by the Logistics TransportIn the the General Assembly

the People's Bank of China (PBOC) ter announcing additional easing measures aimed at achieving the annual growth target of 5 ⁇ , Europe's leading indicators opened up on Tuesday morning.

Euro Stoxx 50 futures %1.14, FTSE 100 futures %0.52 and DAX futures %It's up 0.73.

China unveils biggest package to boost economy

Following the Federal Reserve's massive rate cut last week, the People's Bank of China (PBOC) has set the Reserve Requirement Rate (RRR), which represents the percentage of deposits that banks must hold reserves at the central bank. %He announced a 0.5% discount.

At a seven-day repo interest rate on this rare move, companied by a decrease of 0.2 ⁇ . In addition, the PBOC announced a historic $5.3 trillion (€4.8 trillion) package aimed at lowering mortgage rates and down payment terms for second-home buyers.

In addition, Governor Pan Gongsheng announced that a liquidity injection of 500 billion yuan (€64 billion) will be carried out to support the stock markets; Thus, securities and insurance companies were allowed to invest in stocks through central bank debts.

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In response, stock markets rose across Asia; the Hang Seng Index %over 3 ⁇ , while the mainland markets of China are %It has increased by more than 2.

The MSCI Asia Pacific Index rose 0.7%. However, the Australian ASX 200 Index recorded a slight decline after the Reserve Bank of Australia (RBA) kept its cash interest rate stable and maintained a hawkish outlook.

European mining stocks expected to recover

PBOC ⁇ 's comprehensive incentive measures to support the real estate market have also increased growth-sensitive commodity prices.

Copper futures rose 2.1 percent to $4.44 per pound, the highest since July. Precious metals also saw a sharp rise; Spot gold prices rose above $2,635 per ounce, while gold futures rose above $10 to $2,663 per ounce.

Silver futures at 07:00 CEST %It increased by 1.22 to $31.47 per ounce.

Energy commodities such as crude oil and natural gas followed suit, taking advantage of the broad-based commodity rise. Iron ore futures (SGX TSI Iron ore ) %It rose 1.1 percent to $92.40 per metric ton.

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The increase in metal prices is expected to support the industrial and material sectors by supporting European mining and energy stocks.

China's efforts to stabilize the besieged real estate market are expected to increase demand for industrial metals and critical minerals, which are the main outputs of major mining companies such as Rio Tinto, Glencore, Anglo American and BHP.

The mining sector has been underperforming globally for the past four months due to a decline in raw material prices.

Euro Stoxx 600 Index of Basic Ingredients %The Pan-European Stoxx 600 Index has been down 4.67 since the beginning of the year. %It's up 7.9.

Interest rate cut is expected to trigger market recovery in the near term

As global central banks are likely to accelerate their relaxation cycles, stock markets may continue to benefit from pro-growth monetary policies in the short term.

The European Central Bank (ECB) is expected to deepen interest rate cuts for the rest of the year following unexpected sharp drops in business activity on Tuesday.

The data revealed that manufacturing and service PMIs contracted further in major European economies, including France and Germany.

But investors can be increasingly cautious as business conditions worsen and the risk of a global economic downturn arises.

Fears of stagnation continue, fueled by worsening economic data and rising geopolitical tensions, as well as ongoing conflicts in the Middle East and Ukraine.

Oil Prices Lowest in Nine Months Due to Global Uncertainty

by the Logistics TransportIn the the General Assembly

Crude oil prices fell this week on the second trading day in a row due to weak economic data from both China and the United States.

WTI futures price fell below $70 per barrel for the first time since December 2023, while Brent futures fell below $74 per barrel, a level not seen for nine months.

Both indicator oil futures since their last peak on August 27 %It has fallen more than 10 times.

While the wave of sales in Nvidia-led technology stocks has led to a collapse in global markets, the risk-avoidance trend has also contributed to the downward pressure on the oil market.

The CBOE Volatility Index, known as the fear indicator of the markets, rose above 20 ⁇ , the highest level in a month, as investors fled risky assets with increasing fears of recession.

By the end of August, the escalation of the military conflict between Iran and Israel and the production cuts in Libya had caused oil prices to rise.

But while concerns of a wider regional war have waned, fears of a recession have precluded geopolitical tensions, and a possible solution to the Libyan conflict is expected to restore oil production.

Fears of recession are rising

A series of disappointing data from the U.S. has raised concerns that economic conditions are deteriorating and oil demand will weaken.

The world's largest economy reported a weaker-than-expected Manufacturing Purchasing Managers' Index (PMI), which pointed to four consecutive months of contracting factory activity in August.

JOLTS job postings data released on Wednesday showed that the number of available jobs has fallen to its lowest level since January 2021.

Deteriorating economic data significantly increased the likelihood of a deeper interest rate cut by the Federal Reserve next month, with U.S. 2-year and 10-year government bond yields briefly shifting to positive territory after their reversal for the second time since 2022.

Short-term government bond yields are generally more susceptible to changes in interest rates in the near term.

Historically, economic recession tends to occur when the difference between the two indicators U.S. government bond yield shifts back to the positive zone after reversal.

In addition, China, the world's largest oil importer, reported a weaker-than-expected Manufacturing PMI over the weekend, showing that factory production continued to contract for the third consecutive month in August.

China's Caixin Services PMI, announced on Wednesday, also fell short of expectations, showing that the country's economic recovery continues to weaken.

OPEC+ could delay production growth

According to Reuters, OPEC+ may postpone its planned production increase in October in the face of falling oil prices.

The organization had previously agreed to increase production by 180,000 barrels per day as part of its plan to phase out production cuts.

Ongoing production cuts may provide some support to the weakening crude oil market, but this news did not push prices up immediately due to a tendency to avoid the current risk.

In June, OPEC and its allies agreed to extend production cuts of 3.66 million barrels per day until the end of 2025, with voluntary cuts continuing through September this year.

The world's total oil supply %The organization, which provides more than 37 ⁇ , has been reducing production since 2022 ⁇ , and this is the reason why global demand %It caused a daily cut of 5.86 million barrels, which corresponds to 5.7 ⁇ .