Maintaining China’s monetary easing is also positive for the virtual currency market, etc.

2/21 (Tue) morning market trends (compared to the previous day)

traditional finance

- Hong Kong Hang Seng: 20,886.9 +0.8%
- Shanghai Composite Index: 3,290 +2%
- NY Dow: Closed
- Nasdaq: Closed
- Nikkei Stock Average: ¥27,531 +0.06%
- USD/JPY: 134.2 +0.01%
- US dollar index: 103.8 +0.02%
- Gold Futures: $1,850 +0.01%

crypto assets

Bitcoin: $24,764 +1.2%
Ethereum: $1,703 +1.3%

Closed today for the US Presidents Day holiday.

This week, at 4:00 on the 23rd (Thursday), the minutes of the US Federal Open Market Committee (FOMC) and the revision of the quarterly GDP personal consumption are ahead.

23rd, 4:00 (Thursday): US FOMC Minutes
23rd 22:30 (Thursday): U.S. October-December Quarterly GDP Personal Consumption and Core PCE Revised Values
24th 22:30 (Friday): US January Personal Consumption Expenditure (PCE deflator)
24th 24:00 (Friday): University of Michigan Consumer Confidence Index February Confirmed value

connection: The US economy “Will it be a no-landing?”

connection: What is the CPI (Consumer Price Index) that attracts attention in the virtual currency market?

China maintains monetary easing

China’s central bank, the People’s Bank of China, announced on the 20th that it will leave the 1-year and 5-year loan prime rate (LPR), which is the de facto policy interest rate, unchanged, and medium-term funds on the market In February, it increased by 199 billion yuan (about 3.9 trillion yen). The deferment was in line with market expectations for the sixth straight month. The 5-year LPR is what impacts mortgage rates.

China abolished its “zero coronavirus” policy in December last year to revitalize economic activity. Given the strong recovery in demand from sectors such as travel and movie box office revenue during the Lunar New Year holidays in January, it seems that the government decided that additional monetary easing was not necessary for the time being from the perspective of assessing economic trends. However, some analysts expect interest rate cuts to support macro policy after the National People’s Congress in March.

Inflation and other pressures have been relatively limited since China, unlike the West, has not implemented large-scale QE during the pandemic. Although economic activity is currently recovering, it is still weak, and there is speculation that there is room for monetary easing in the first half of this year. The People’s Bank of China lowered both LRPs in August last year to support the economy.

Positive for the cryptocurrency market?

Amidst the continuation of monetary easing in China, which is the exact opposite of the interest rate hike policy in Europe and the United States, the attitude of risk appetite pushed up the Chinese and Hong Kong stock markets on the 20th, posting a sharp rise since November last year. The CSI300 index, which consists of 300 leading companies listed on the Shanghai and Shenzhen stock markets, the Shanghai Composite Index, and the Hong Kong Hang Seng Index also rebounded sharply, with real estate stocks and financial stocks in particular rising. According to private sector statistics, sales of new homes in 16 Chinese cities have increased for three consecutive weeks.

Source: Tradingview

The prolonged housing recession in China is becoming serious. The China Evergrande Group defaulted on its debts in 2021, and many other companies have defaulted on their debts. In a bid to improve business conditions, several central government agencies, including the People’s Bank of China and the China Banking and Insurance Regulatory Commission, have announced since September last year a policy shift to remove many of the regulations, as a bailout to ease financing difficulties in the real estate industry. launched.

In general, the stock market is the risk asset most likely to benefit from monetary easing by the central bank, but in China, the demand for real estate investment is said to be higher than for stocks against the backdrop of past stock market crashes and bank runs. be. Chinese large-lot (whale) trader “Crypto bear cat” seems to believe that large-lot Chinese traders, who are increasing their risk appetite, are likely to be allocating funds to cryptocurrencies.

Chinas real estate prices are pumping , so are crypto

Most don’t know Chinese QE always results in a even bigger real estate mania , as well as bigger Ponzi , risk rallies

Most of Chinese liquidity go into real estate and speculative risk, NOT stock market https://t.co/KYmEdB0MkU

— Crypto bear cat (@NoodleofBinance) February 18, 2023

China has effectively banned all cryptocurrency trading in 2021, but many Chinese traders who have moved to Twitter are still able to use major overseas exchanges, and trading has recently seen a resurgence. It is said that there is The rise rate of stocks with strong Chinese support, such as Filecoin and Conflux, stands out.

In addition, the Hong Kong Securities and Futures Commission’s move to allow a wide range of cryptocurrency investments by individual investors, which had previously been restricted from June 1 this year, is also expected to encourage the re-inflow of Chinese money.

connection: Hong Kong authorities consider resuming cryptocurrency trading for individual investors

connection: Recommended for cryptocurrency investors, advantageous shareholder benefits “10 selections”

GM radio last night

Coinpost Global held its 7th GM Radio last night. This time we had a guest talk with Igneus Terrenus, Head of Communications & Business Development at Mantle Network.

https://t.co/dJUKP4woKb

— CoinPost Global (We’re hiring!) (@CoinPost_Global) February 20, 2023

connection: “GM Radio” guest is Ethereum L2 developer Mantle

GM radio last week

connection: “GM Radio” Ethereum L2 developer Scroll will participate next time

The 6th GM Radio was held this Thursday at 12:30. As a guest, we invited Mr. Sandy Peng, co-founder of the zk rollup development company “Scroll”, to talk about the competition between L2 and future plans under the theme of “ZK competition in EVM equivalence”.