Today's market focus: Internal bank notices indicate possible deposit rate cuts.


Shenzhen unveils "receive homes, not loans" policy. Banks hint at lower savings rates. U.S. data shows the economy cooling. Markets expect Saudi Arabia and Russia to keep production cuts. Japan's central bank hints at a rate hike next year.

Market Review


Key News

Chinese Market

1. Shenzhen Officially Announces New Policy of "Recognizing Housing but Not Loans"

Shenzhen officially announced the new policy of "recognizing housing but not loans." Under this policy, if family members (including the borrower, spouse, and minor children) apply for a loan to purchase commercial housing in Shenzhen and do not own full housing in the city, regardless of whether they have used loans to buy housing before, financial institutions will implement housing credit policies as for the first set of housing. This policy, significant for first-tier cities, will substantially reduce the down payment and interest rate costs for improving housing needs. Following Shenzhen and Guangzhou, it is expected to expedite the introduction of related policies in Beijing and Shanghai.

2. Internal Notifications from Some Banks Show Deposit Rates May Be Lowered

It is reported that a new round of deposit rate reductions is imminent, with some banks having already issued internal notices. The longer the deposit period, the greater the reduction, and the rates for 3-year and 5-year deposits may decrease more than in the previous round. In the last round, the listing rates for 3-year and 5-year deposits both fell by 0.15 percentage points. Currently, the main commercial banks' listing rates for 1-year, 2-year, 3-year, and 5-year deposits are 1.65%, 2.05%, 2.45%, and 2.50%, respectively.

3. Multiple Departments Voice "Financial Support for Private Enterprises"

China's central bank, Securities Regulatory Commission, and Financial Regulatory Authority, among others, stated that they would guide financial resources to flow more to private and small and micro enterprises and continue to increase the credit supply to private enterprises. The People's Bank of China said that the draft document on financial support for private enterprises had been formed and would increase financial resource input, leverage the role of the multi-level capital market, facilitate cross-border financing, strengthen policy incentives, and facilitate financing for private enterprises.

4. Five Departments Issue Document to Regulate Data Services of Money Broking Companies

To regulate the data services provided by money broking companies, encourage legal and reasonable use of data, ensure data security, enhance market transparency, promote fair market competition, and facilitate the high-quality development of the industry, the National Financial Supervisory Administration, the central bank, the Securities Regulatory Commission, the Internet Information Office, and the Foreign Exchange Administration have jointly issued the "Notice on Regulating Data Services of Money Broking Companies." The notice requires money broking companies to strengthen data governance, ensure data security, standardize data standards, improve data service quality, clarify the scope of acceptable service institutions, strengthen cooperation management, sign service agreements, and regulate data use.

Overseas Market

1. U.S. Data Shows Continued Economic Cooling

The private sector employment number (ADP employment) in the U.S. for August showed the smallest increase in five months; the U.S. real GDP for the second quarter, adjusted for seasonality and inflation, was surprisingly revised from the initial 2.4% to 2.1%; and the Fed’s most favored inflation indicator, the second quarter core PCE price index quarter-over-quarter growth rate, hit a two-year low. Analysts said that the data released on Wednesday, especially the inflation data, continued to cool down, easing the pressure for further rate hikes at the Fed’s September meeting.

2. Markets Expect Saudi Arabia and Russia to Extend Production Cuts

Most traders and analysts surveyed by media expect Saudi Arabia's policy of cutting 1 million barrels of oil per day to extend at least until October. Some representatives of Opec and its allies also privately predict the same. Meanwhile, Russian Deputy Prime Minister Novak mentioned that he is discussing the action plan for October with partners and does not rule out extending the oil export reduction measures to October.

3. Hawkish Member of the Bank of Japan Suggests Possible Rate Hike Next Year

After decades of unconventional monetary policy, the Bank of Japan's 2% inflation target is within reach. Naoki Tamura, a leading proponent of exiting monetary stimulus policies at the Bank of Japan, stated that by the first quarter of next year, the Bank of Japan might have enough data to determine if the conditions for gradually exiting ultra-loose monetary policy have been met. Once the inflation target is confirmed to have been achieved, ending negative interest rates could be one of the possible policy measures.

4. The EU to Establish Special Fund to Provide Long-Term Aid to Ukraine

At the informal meeting of EU defense and foreign ministers, Jose Borrell, the EU High Representative for Foreign Affairs and Security Policy, announced that the defense ministers of the EU member states discussed establishing a special fund. This fund plans to provide 5 billion euros annually to offer long-term military equipment support to Ukraine.

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