London Daily

Focus on the big picture.
Wednesday, Oct 22, 2025

Central banks breathe life into markets

Central banks breathe life into markets

Trade of the Day: Stocks, futures in broad relief rally on stimulus hopes; US Treasury yields plummet as rate cut eyed.Financial markets roared back to life on Monday on intervention expectations from the central banks of the world’s three biggest economies, giving investors hope. Bank of Japan (BoJ), joined the US Federal Reserve and the People’s Bank of China in promising economic support to offset the financial damage from the coronavirus. The Bank of Japan said it will “closely monitor future developments, and will strive to provide ample liquidity and ensure stability in financial markets through appropriate market operations and asset purchases.”

That fueled a rally in markets starting with Japan’s Nikkei 225 index, which rose 0.95%, while the CSI 300 index surged 3.29% and the Hang Seng Index climbed 0.62%. The MSCI Asia Pacific ex-Japan index added 0.92%.

“We suspect that the BoJ’s response to the coronavirus will mostly consist of liquidity provision to banks and a renewed acceleration of its ETF purchases. We are not forecasting a cut in the bank’s short-term policy rate,” said Capital Economics in a report.

This added to the optimism sparked by the US central bank, which said it would “use our tools and act as appropriate to support the economy.”

China’s central bank said small- and medium-sized businesses nationwide with principal or interest due between January 25 and June 30 can delay repaying their debt without attracting penalties.

This followed a record low reading of the Caixin to 40.3 for February, the lowest level since the survey began in 2004, falling steeply from January’s 51.1 and missing the analyst forecast of 45.7.

“Production halts and severe staff shortages had contributed to intense capacity pressures during February, as signaled by the fastest rate of backlog accumulation for almost 15 years,” said Bernard Aw, principal economist at IHS Markit. “The timing as to when the coronavirus-related restrictions will be relaxed is critical to restoring China’s manufacturing productive capacity – and therefore engendering a recovery.”

But he predicted a recovery next month.

“Nevertheless, the current situation is expected to improve as soon as in March with an increasing number of manufacturing enterprises resuming work.”

The futures on the S&P 500 Index rose 0.7% and Nasdaq 100 Index futures jumped 0.9%, but European stocks were down with the Stoxx Europe 600 falling 0.2% as investors worried about the spread of the virus in Italy, Spain, Germany and France.

The IHS Markit US Manufacturing PMI fell to 50.7 in February from 51.9 in January, but analysts saw some signs of improvement.

“As expected, the release highlights supply-chain disruptions due to the impact of the coronavirus in China, but interestingly the survey indicated stronger optimism in future production. Whether this optimism will manifest into future output will likely be dependent on the spread of the virus and its impact on supply and demand,” said Rob Mangrelli, director at Chatham Financial.

“Markets have already priced in an accelerated pace of Fed rate cuts over the last two weeks and will continue to assess the impact of the virus along with the potential monetary policy response as additional tier 1 economic data such as services PMI and nonfarm payrolls are released later this week.”

Newsletter

Related Articles

0:00
0:00
Close
‘Frightening’ First Night in Prison for Sarkozy: Inmates Riot and Shout ‘Little Nicolas’
White House Announces No Imminent Summit Between Trump and Putin
US and Qatar Warn EU of Trade and Energy Risks from Tough Climate Regulation
Apple Challenges EU Digital Markets Act Crackdown in Landmark Court Battle
Nicolas Sarkozy begins five-year prison term at La Santé in Paris
Japan stocks surge to record as Sanae Takaichi becomes Prime Minister
This Is How the 'Heist of the Century' Was Carried Out at the Louvre in Seven Minutes: France Humiliated as Crown with 2,000 Diamonds Vanishes
China Warns UK of ‘Consequences’ After Delay to London Embassy Approval
France’s Wealthy Shift Billions to Luxembourg and Switzerland Amid Tax and Political Turmoil
"Sniper Position": Observation Post Targeting 'Air Force One' Found Before Trump’s Arrival in Florida
Shouting Match at the White House: 'Trump Cursed, Threw Maps, and Told Zelensky – "Putin Will Destroy You"'
Windows’ Own ‘Siri’ Has Arrived: You Can Now Talk to Your Computer
Thailand and Singapore Investigate Cambodian-Based Prince Group as U.S. and U.K. Sanctions Unfold
‘No Kings’ Protests Inflate Numbers — But History Shows Nations Collapse Without Strong Executive Power
Chinese Tech Giants Halt Stablecoin Launches After Beijing’s Regulatory Intervention
Manhattan Jury Holds BNP Paribas Liable for Enabling Sudanese Government Abuses
Trump Orders Immediate Release of Former Congressman George Santos After Commuting Prison Sentence
S&P Downgrades France’s Credit Rating, Citing Soaring Debt and Political Instability
Ofcom Rules BBC’s Gaza Documentary ‘Materially Misleading’ Over Narrator’s Hamas Ties
Diane Keaton’s Cause of Death Revealed as Pneumonia, Family Confirms
Former Lostprophets Frontman Ian Watkins Stabbed to Death in British Prison
"The Tsunami Is Coming, and It’s Massive": The World’s Richest Man Unveils a New AI Vision
Outsider, Heroine, Trailblazer: Diane Keaton Was Always a Little Strange — and Forever One of a Kind
Dramatic Development in the Death of 'Mango' Founder: Billionaire's Son Suspected of Murder
Two Years of Darkness: The Harrowing Testimonies of Israeli Hostages Emerging From Gaza Captivity
EU Moves to Use Frozen Russian Assets to Buy U.S. Weapons for Ukraine
Europe Emerges as the Biggest Casualty in U.S.-China Rare Earth Rivalry
HSBC Confronts Strategic Crossroads as NAB Seeks Only Retail Arm in Australia Exit
U.S. Chamber Sues Trump Over $100,000 H-1B Visa Fee
Shenzhen Expo Spotlights China’s Quantum Step in Semiconductor Self-Reliance
China Accelerates to the Forefront in Global Nuclear Fusion Race
Yachts, Private Jets, and a Picasso Painting: Exposed as 'One of the Largest Frauds in History'
Australia’s Wedgetail Spies Aid NATO Response as Russian MiGs Breach Estonian Airspace
McGowan Urges Chalmers to Cut Spending Over Tax Hike to Close $20 Billion Budget Gap
Victoria Orders Review of Transgender Prison Placement Amid Safety Concerns for Female Inmates
U.S. Treasury Mobilises New $20 Billion Debt Facility to Stabilise Argentina
French Business Leaders Decry Budget as Macron’s Pro-Enterprise Promise Undermined
Trump Claims Modi Pledged India Would End Russian Oil Imports Amid U.S. Tariff Pressure
Surging AI Startup Valuations Fuel Bubble Concerns Among Top Investors
Australian Punter Archie Wilson Tears Up During Nebraska Press Conference, Sparking Conversation on Male Vulnerability
Australia Confirms U.S. Access to Upgraded Submarine Shipyard Under AUKUS Deal
“Firepower” Promised for Ukraine as NATO Ministers Meet — But U.S. Tomahawks Remain Undecided
Brands Confront New Dilemma as Extremists Adopt Fashion Labels
The Sydney Sweeney and Jeans Storm: “The Outcome Surpassed Our Wildest Dreams”
Erika Kirk Delivers Moving Tribute at White House as Trump Awards Charlie Presidential Medal of Freedom
British Food Influencer ‘Big John’ Detained in Australia After Visa Dispute
ScamBodia: The Chinese Fraud Empire Shielded by Cambodia’s Ruling Elite
French PM Suspends Macron’s Pension Reform Until After 2027 in Bid to Stabilize Government
Orange, Bouygues and Free Make €17 Billion Bid for Drahi’s Altice France Telecom Assets
Dutch Government Seizes Chipmaker After U.S. Presses for Removal of Chinese CEO
×