📮US and China Insight🎙

🤼Split the social spending🥊

Biden’s administration’s social and climate change spending is likely to take shape in a different form. Instead of the large bill, President Biden is expected to break them up into segments to pass through Congress. 

In his anniversary speech as a President, he shared the progress America has made thus far, climbing out of the pandemic and the work needed in the future. With the lack of monetary support in the future, Pika World will be keenly looking into the prospect of the new format when it reaches Congress for vote. 

💸China: Finally, the easing is here🪜

Investors have been yearning for a long neck for the Chinese central banks to take more proactive action towards stimulating the economy. Finally, they got that on Thursday as the central bank took two bold steps. 

First, the 1-year loan prime rate is reduced from 3.8% to 3.7%. This is a follow-up from a December cut. Then we have the 5-year prime loan rate cut from 4.65% to 4.6%, which is a significant step. It is the first time since April 2020, when Covid-19 impact was at its peak. 

The rate cut has a massive impact as prime loan rates tend to affect companies’ lending rates and household loan packages. Ultimately, it will lower borrowing costs and make mortgages more affordable. 

⏰Markets turbulent continues⛽️

While bond yield stabilized, markets had a massive sell-off, evaporating gains in the early session. Pika World favourite Russell 2000 continued to slide. Nasdaq and Russell 2000 is in technical correction and we are expecting more downside risk unless there is greater clarity on the interest rate hike and balance sheet prospect ahead. 

Pika World wishes all friends a splendid weekend rest.