Market Lab Report - Premarket Pulse 9/9/15
Futures are up more than 1% at the time of this writing as both Japan and China said they would both provide additional stimulus to their ailing economies. The stimulus comes in the form of corporate tax reductions in Japan. China meanwhile is doing a debt swap on 3.2 trillion yuan ($512 billion), which allows local Chinese governments to sell bonds to replace older, costlier debt.
Further, in its latest statement, the finance ministry of China said that as of Aug. 27 local governments had raised 1.82 trillion yuan ($291 billion) through debt issues. This is equivalent to 48% of the total quota allowed by the central government, suggesting that there is more room for local governments to raise funds.
The easing is fairly significant, especially given additional headroom for more easing out of China, thus markets jumped higher on the news as the trend of monetary easing has been reaffirmed by the second largest economy in the world.
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