China news boosts, risk appetite heats up significantly, Bitcoin approaches $98,000

Author: Bao Yilong

Source: Wall Street News

Risk preferences have greatly boosted as China cuts reserve requirement ratio and confirms economic and trade talks with the United States . Asian stock markets rose, and futures prices such as iron ore and steel rose. Risk aversion sentiment faded, the Federal Reserve's expectation of interest rate cuts this week further weakened, the US dollar strengthened, and gold fell sharply during the Asian session.

At 9 a.m. on Wednesday, the State Council Information Office held a press conference. People's Bank of China Governor Pan Gongsheng also announced a cut in the reserve requirement ratio and interest rate, which will lower the reserve requirement ratio of financial institutions by 0.5 percentage points and lower the policy interest rate by 0.1 percentage point, from the current 1.5% to 1.4%, and at the same time lower the housing provident fund interest rate by 0.25 percentage points . Earlier today, the Foreign Ministry said that Vice Premier He Lifeng will visit Switzerland from May 9 to 12. During his visit to Switzerland, Vice Premier He Lifeng, as the leader of China-US economic and trade, will hold talks with US Treasury Secretary Besent .

"This shows that both sides may have the willingness and enthusiasm to have high-level meetings, so I think it is definitely a positive signal. This is obviously good for the Asian foreign exchange market." The Federal Reserve will meet to determine interest rates later on Wednesday, and expectations of interest rate cuts will weaken. Investors believe the Fed has little chance of taking action on Wednesday, with a chance of a rate cut in June being only 33%, down from 64% a month ago.

Investor trading sentiment heated up, risky asset prices rose, Bitcoin prices jumped 3% during the Asian session, and Ethereum's increase once soared by more than 4%. The trend of hedging products was significantly weaker, with gold falling by more than US$40, falling below the key price of 3400. The Swiss franc and the yen depreciated by nearly 0.6%.

Asia Pacific Stock Market:

• Optimism drove the Asia-Pacific stock market to rise, with MSCI Asia emerging markets up 0.4%. The South Korean Composite Index rose by more than 0.5%, the MSCI Vietnam Index rose by more than 0.4%, and the FTSE Malaysia Index rose by nearly 0.3%.


Money Market:

• Tariff news is improving, while the Fed's expectation of a rate cut has weakened significantly, with the US dollar index rising nearly 0.3% during the Asian session.


• Bitcoin soared 3% at the Asian session, approaching $98,000, and then the gains fell back to 2%.


Commodities:

• Risk aversion sentiment faded, gold fell sharply by $40 during the Asian session, falling below the $3,400/ounce integer mark, and the intraday decline once exceeded 2%. As of press time, the decline narrowed to 1.2%.


• Previous tariff turmoil has damaged macroeconomic sentiment. As China and the United States will promote economic and trade talks, commodity futures such as cotton, soybeans, wheat, iron ore, etc. have all risen to varying amplitudes. CBOT soybeans, corn, wheat, etc. rose by more than 1%.


• International crude oil prices continued to rebound overnight, with WTI crude oil rising by more than 0.63%, and Brent crude oil rising by 0.50%. Natural gas rose 2%.