Trump demanded FED to cut rates to zero!

https://sg.finance.yahoo.com/news/trump-demands-fed-to-cut-interest-rates-to-zero-or-less-121700558.html

Either Trump doesn't understand economics or he has seen the latest GDP numbers for him to demand FED to cut rates to zero.

Trump is wishfully thinking that he can refinance the national debts at zero interest rates after the US FED cuts them to zero.  He has mistaken the national debts with mortgage debts.  National debts are non-callable while mortgage debts are callable.  Therefore, the US government can only buy back the national debts from the treasuries market and re-issue new bonds at lower interest rates if the US interest rates are at zero.

However, something is amiss in Trump's thinking.  First of all, the US government doesn't have the money to buy back all the national debts because it doesn't even have enough money to pay all the federal employees resulting in a potential government shutdown.  Next, the US government has to pay much higher prices to buy back the national debts in the open market and this will wipe out all the interest savings or incur more losses.  Third, this buyback action will disrupt the treasuries market and create big chaos for the international markets.

In this regard, Trump shows his innateness and lack of proper economics understanding.

In another perspective, Trump must have seen the latest GDP numbers which were so bad that he panicked and demanded FED to cut rates to zero from 2-2.25%.

We had indicated a very bad GDP number for the US after the PMI report.

http://sg-stock.blogspot.com/2019/09/ism-pmi-analysis-for-us-economy-in.html

SGX - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
01/04/19	phillip	SGX	7.15	9.01	Buy
01/25/19	CIMB	SGX	7.5	7.9	Add	PER22.1x FY20
01/25/19	DMG & Partners	SGX	7.5	8.2	Buy	PER22x FY20
01/28/19	phillip	SGX	7.57	8.36	Buy	PER23.2x FY19
01/28/19	OCBC	SGX	7.57	7.98	Buy	PER22x F19/20
02/22/19	Citibank	SGX	7.87	7.8	Hold
03/12/19	Citibank	SGX	7.46	7	Sell
03/14/19	DBS Vickers	SGX	7.26	7.05	Hold	DDM, PER20x CY20
03/19/19	phillip	SGX	7.31	8.17	Accumulate	PER23.2x
04/05/19	DMG & Partners	SGX	7.42	8.1	Buy	PER23x FY20
04/26/19	OCBC	SGX	7.26	7.6	Hold	PER21x FY20
04/26/19	DBS Vickers	SGX	7.26	7.05	Hold	DDM, PER20x FY20
04/26/19	Kim Eng	SGX	7.26	8.79	Buy	PER23x FY19
04/29/19	phillip	SGX	7.4	8.09	Accumulate	PER21.4x
04/29/19	CIMB	SGX	7.4	7.9	Add	PER22.1x FY20
06/28/19	DBS Vickers	SGX	7.95	7.05	Hold	DDM, PER20x FY20
07/15/19	phillip	SGX	7.99	8.09	Accumulate	PER21.4x
08/01/19	DMG & Partners	SGX	7.92	8.1	Neutral	PER23x FY20
08/01/19	DBS Vickers	SGX	7.92	8.3	Buy	DDM
08/02/19	phillip	SGX	7.78	8.09	Accumulate	PER21x
08/05/19	CIMB	SGX	7.98	8.1	Hold	PER21.5x

Sembcorp Marine - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
01/10/19	DIR	Sembcorp Marine	1.62	1.62	Hold	Cut from $1.78, PB1.8x FY19
01/22/19	Amfrasers	Sembcorp Marine	1.66	2.5	Buy
02/01/19	UOB Kay Hian	Sembcorp Marine	1.6	1.83	Hold	PB1.7x FY19, Buy @ $1.50
02/04/19	DBS Vickers	Sembcorp Marine	1.59	2.4	Buy	PB2.1x FY19
02/21/19	CIMB	Sembcorp Marine	1.68	2.21	Add	PB2x CY19
02/21/19	OCBC	Sembcorp Marine	1.68	1.77	Hold
02/21/19	phillip	Sembcorp Marine	1.68	1.76	Neutral	PB1.6x
02/21/19	Lim & Tan	Sembcorp Marine	1.68	0	Hold
02/26/19	Amfrasers	Sembcorp Marine	1.72	2.48	Buy
04/09/19	Amfrasers	Sembcorp Marine	1.7	2.48	Buy
04/09/19	DBS Vickers	Sembcorp Marine	1.7	2.4	Buy
05/03/19	CIMB	Sembcorp Marine	1.69	2.21	Add	PB2x
05/06/19	phillip	Sembcorp Marine	1.67	1.76	Neutral	PB1.6x
05/06/19	OCBC	Sembcorp Marine	1.67	1.77	Hold
05/06/19	Amfrasers	Sembcorp Marine	1.67	2.48	Buy
05/06/19	DBS Vickers	Sembcorp Marine	1.67	2.4	Buy	PB2.1x FY19
05/30/19	OCBC	Sembcorp Marine	1.45	1.6	Hold	PB1.45x
06/04/19	DMG & Partners	Sembcorp Marine	1.39	1.99	Buy	PB1.8x FY20
07/03/19	CIMB	Sembcorp Marine	1.54	1.75	Add	PB1.6x CY19
07/03/19	OCBC	Sembcorp Marine	1.54	1.6	Hold
07/04/19	Macquarie	Sembcorp Marine	1.41	1.57	Neutral
07/04/19	DBS Vickers	Sembcorp Marine	1.41	2.4	Buy
07/31/19	DBS Vickers	Sembcorp Marine	1.36	1.9	Buy	PB1.8x FY19
07/31/19	Amfrasers	Sembcorp Marine	1.36	1.59	Neutral	PB1.6x FY19
07/31/19	DMG & Partners	Sembcorp Marine	1.36	1.8	Buy	PB1.64x FY20
07/31/19	CIMB	Sembcorp Marine	1.36	1.16	Reduce	PB1.1x
07/31/19	UOB Kay Hian	Sembcorp Marine	1.36	1.32	Hold	DCF, Buy @ $1.25
08/06/19	Macquarie	Sembcorp Marine	1.28	1.4	Neutral	PB
09/03/19	UOB Kay Hian	Sembcorp Marine	1.16	1.22	Hold	Buy @ $1.10
09/03/19	DMG & Partners	Sembcorp Marine	1.16	1.63	Buy	PB1.48x FY20
09/09/19	CIMB	Sembcorp Marine	1.19	1.26	Hold	PB1.2x CY19

Sembcorp Industries - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
01/10/19	DIR	Sembcorp Industries	2.64	3.05	Outperform	Sum of parts, cut from $3.26
01/15/19	UOB Kay Hian	Sembcorp Industries	2.63	3.2	Buy	Sum of parts
01/23/19	CIMB	Sembcorp Industries	2.69	3.49	Add
02/01/19	UOB Kay Hian	Sembcorp Industries	2.59	3.2	Buy
02/04/19	DBS Vickers	Sembcorp Industries	2.58	3.7	Buy
02/21/19	Lim & Tan	Sembcorp Industries	2.66	0	Hold
02/25/19	DBS Vickers	Sembcorp Industries	2.67	3.9	Buy	RNAV (10% discount), PB1x
03/13/19	UOB Kay Hian	Sembcorp Industries	2.57	2.8	Hold	Sum of parts, Buy @ $2.35
03/18/19	Lim & Tan	Sembcorp Industries	2.52	0	Hold
04/09/19	DBS Vickers	Sembcorp Industries	2.75	3.9	Buy
05/16/19	OCBC	Sembcorp Industries	2.54	3.13	Buy	Sum of parts
05/16/19	DBS Vickers	Sembcorp Industries	2.54	3.9	Buy	Sum of parts, PB1x
05/16/19	CIMB	Sembcorp Industries	2.54	3.41	Add	Sum of parts
05/17/19	phillip	Sembcorp Industries	2.55	3.75	Buy	Sum of parts
06/04/19	OCBC	Sembcorp Industries	2.38	3.03	Buy	Sum of parts
07/03/19	OCBC	Sembcorp Industries	2.47	3.03	Buy
07/04/19	Macquarie	Sembcorp Industries	2.41	2.84	Outperform
08/15/19	CIMB	Sembcorp Industries	2.26	2.83	Add	Sum of parts
08/15/19	UOB Kay Hian	Sembcorp Industries	2.26	2.34	Hold
08/16/19	DBS Vickers	Sembcorp Industries	2.26	3.2	Buy	Sum of parts (10% discount), PER16x FY19, PB0.8x FY19
09/12/19	DBS Vickers	Sembcorp Industries	2.21	3.2	Buy	Sum of parts (10% discount), PER16x FY19, PB0.8x FY19
09/12/19	Lim & Tan	Sembcorp Industries	2.21	0	Buy

Stock calls for 12 September 2019

Date	Analyst	Company	Last	Target	Call	Valuation
09/12/19	DMG & Partners	APAC Realty	0.495	0.65	Buy
09/12/19	DMG & Partners	City Developments	9.9	9.2	Neutral
09/12/19	DBS Vickers	Sabana	0.455	0.48	Hold	DCF
09/12/19	DBS Vickers	Sembcorp Industries	2.21	3.2	Buy	Sum of parts (10% discount), PER16x FY19, PB0.8x FY19
09/12/19	Lim & Tan	Sembcorp Industries	2.21	0	Buy

Cathy Pacific to cut capacity because HK travel falls.

https://sg.finance.yahoo.com/news/1-cathay-pacific-cut-capacity-091425705.html

Cathy Pacific has only itself to blame for the predicament it is facing.

Cathy Pacific management supported its employees to be anti-government protestors.  This airliner has about 3,000 potential terrorists on its payrolls and this will create a flight risk for passengers.

http://sg-stock.blogspot.com/2019/09/cathy-pacific-is-high-risk-airliner-fly.html

If Cathy Pacific doesn't eradicate this large group of potential terrorists by re-educating and re-retraining, the mainland passengers won't have the faith to take this airliner because the employees are emotionally disturbed.

Germany will enter into a recession this current quarter.

https://sg.finance.yahoo.com/news/german-institutes-see-recession-cut-092552134.html

We had anticipated in January 2019 that the EU would slip into a recession much faster than Asia and we followed up with the same issue again in March 2019.

http://sg-stock.blogspot.com/2019/01/north-america-and-europe-will-slip-into.html

http://sg-stock.blogspot.com/2019/03/germany-will-enter-into-recession-in.html

The German Institute IFW has predicted that Germany will slide into a recession this current quarter which corroborates our conclusion.

SATS - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
01/04/19	UOB Kay Hian	SATS	4.59	5.6	Buy
01/11/19	OCBC	SATS	4.94	5.23	Hold	DCF
02/08/19	UOB Kay Hian	SATS	4.8	5.6	Buy
02/14/19	phillip	SATS	4.98	5.47	Accumulate	DCF, PER24.6x FY19
02/14/19	OCBC	SATS	4.98	5.23	Hold
02/14/19	CIMB	SATS	4.98	5.46	Add	PER20.3x
02/14/19	Lim & Tan	SATS	4.98	0	Hold
02/14/19	DBS Vickers	SATS	4.98	5.59	Buy	DCF & PER22x FY19
02/14/19	Kim Eng	SATS	4.98	5.8	Buy
02/15/19	Citi Research	SATS	5.08	6	Buy
03/26/19	UOB Kay Hian	SATS	5.06	5.6	Buy
04/15/19	Kim Eng	SATS	5.31	5.8	Buy
05/13/19	UOB Kay Hian	SATS	5.27	5.6	Buy
05/17/19	OCBC	SATS	5.22	5.35	Hold
05/21/19	phillip	SATS	5.08	5.47	Accumulate	DCF, PER24x FY19
05/21/19	UOB Kay Hian	SATS	5.08	5.05	Hold	Buy @ 4.60
05/21/19	DBS Vickers	SATS	5.08	5.44	Buy	DCF & PER22x FY20
06/03/19	UOB Kay Hian	SATS	5.07	5.05	Hold	Buy @ $4.70
06/06/19	DBS Vickers	SATS	5.04	5.44	Buy
06/12/19	Kim Eng	SATS	5.04	6.1	Buy	DCF
06/17/19	CIMB	SATS	5.14	5.4	Add	PER21.9x CY20
07/05/19	Kim Eng	SATS	5.36	6.1	Buy	DCF
07/15/19	UOB Kay Hian	SATS	5.37	5.05	Sell
07/19/19	UOB Kay Hian	SATS	5.32	4.8	Sell
07/19/19	DBS Vickers	SATS	5.32	5	Hold	DCF
07/19/19	CIMB	SATS	5.32	5.4	Hold	PER21.9x CY20
07/22/19	OCBC	SATS	5	5.28	Hold	FCFF
07/22/19	phillip	SATS	5	5.47	Accumulate
07/22/19	Lim & Tan	SATS	5	0	Hold

Sasseur - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
02/20/19	Kim Eng	Sasseur	0.74	0.9	Buy	DDM
02/20/19	DBS Vickers	Sasseur	0.74	0.97	Buy	DCF
04/03/19	CIMB	Sasseur	0.78	0.92	Add
06/25/19	Kim Eng	Sasseur	0.79	0.9	Buy
08/08/19	DBS Vickers	Sasseur	0.8	0.97	Buy	DCF
08/13/19	CIMB	Sasseur	0.805	0.94	Add	DDM

Sanli Environmental - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
05/06/19	Tayrona	Sanli Env	0.18	0.234	Overweight

Stock calls for 11 September 2019

Date	Analyst	Company	Last	Target	Call	Valuation
09/11/19	UOB Kay Hian	A-Reit	3.14	3.25	Hold	DDM
09/11/19	DMG & Partners	CDL Hospitality	1.63	1.79	Buy
09/11/19	Amfrasers	Frencken	0.675	0.81	outperform	PER10x FY20
09/11/19	DMG & Partners	Fu Yu	0.215	0.24	Buy
09/11/19	DMG & Partners	Manulife US Reit	0.915	0.98	Buy
09/11/19	Lim & Tan	Overseas Edu	0.29	0	Buy
09/11/19	DMG & Partners	Oxley	0.31	0.41	Buy
09/11/19	DMG & Partners	Sheng Siong	1.2	1.32	Buy
09/11/19	DMG & Partners	ST Engineering	3.9	4.7	Buy
09/11/19	DMG & Partners	Suntec Reit	1.94	2.08	Buy
09/11/19	DMG & Partners	UOB	25.77	29.5	Buy
09/11/19	Macquarie	Venture	15.33	17.7	Outperform	Roe-g/Coe-g,PER14x FY19
09/11/19	DMG & Partners	Wilmar	3.8	4.5	Buy

Roxy-Pacific - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
01/17/19	DBS Vickers	Roxy-Pacific	0.405	0.39	Hold
02/25/19	OCBC	Roxy-Pacific	0.415	0.41	Hold
04/17/19	OCBC	Roxy-Pacific	0.4	0.41	Hold
05/09/19	OCBC	Roxy-Pacific	0.405	0.41	Hold
05/10/19	DBS Vickers	Roxy-Pacific	0.405	0.39	Hold	RNAV (55% discount)
07/15/19	OCBC	Roxy-Pacific	0.385	0.41	Hold
08/05/19	DBS Vickers	Roxy-Pacific	0.39	0.39	Hold	RNAV (55% discount)

Riverstone - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
02/27/19	CIMB	Riverstone	1.1	1.22	Add	PER16.7x FY20
02/27/19	DBS Vickers	Riverstone	1.1	1.19	Hold	PER16x FY19
05/14/19	CIMB	Riverstone	0.995	1.22	Add	PER16.5x FY20
05/16/19	DBS Vickers	Riverstone	0.975	1.03	Hold	PER16.8x FY19/20
08/13/19	DBS Vickers	Riverstone	0.9	1.16	Buy	PER14.5x FY20

Raffles Medical - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
01/23/19	phillip	Raffles Medical	1.11	1.16	Accumulate
02/20/19	UOB Kay Hian	Raffles Medical	1.12	1.3	Buy	DCF
02/26/19	DMG & Partners	Raffles Medical	1.12	1.02	Neutral	DCF
02/26/19	OCBC	Raffles Medical	1.12	1.25	Buy
02/26/19	DBS Vickers	Raffles Medical	1.12	1.12	Hold	Sum of parts, PER27x FY18/19
02/26/19	phillip	Raffles Medical	1.12	1.09	Neutral	DCF
04/30/19	DMG & Partners	Raffles Medical	1.07	1.02	Neutral
05/02/19	phillip	Raffles Medical	1.08	1.09	Neutral	DCF
05/02/19	DBS Vickers	Raffles Medical	1.08	1.12	Hold	Sum of parts
05/14/19	Kim Eng	Raffles Medical	1.02	1.13	Hold	DCF
06/12/19	CIMB	Raffles Medical	1.02	1.1	Hold
07/30/19	UOB Kay Hian	Raffles Medical	1.03	1.27	Buy	DCF
07/30/19	DMG & Partners	Raffles Medical	1.03	1.02	Neutral
07/30/19	DBS Vickers	Raffles Medical	1.03	1.12	Hold	Sum of parts
07/31/19	phillip	Raffles Medical	1.04	1.09	Neutral	DCF

Stock calls for 10 September 2019

Date	Analyst	Company	Last	Target	Call	Valuation
09/10/19	DMG & Partners	Avi-Tech	0.31	0.31	Neutral	DCF
09/10/19	Amfrasers	CSE Global	0.46	0.64	Outperform	Sum of parts, PER12x, PB2x
09/10/19	Lim & Tan	SPH	1.99	0	Hold
09/10/19	DBS Vickers	UOL	7.47	8.53	Buy	RNAV (35% discount)
09/10/19	UOB Kay Hian	Yangzijiang	0.98	1.46	Buy	PB0.84x

Q & M - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
01/23/19	phillip	Q & M	0.495	0.513	Neutral

Propnex - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
02/27/19	UOB Kay Hian	Propnex	0.565	0.66	Buy
04/01/19	UOB Kay Hian	Propnex	0.595	0.66	Buy
05/16/19	UOB Kay Hian	Propnex	0.505	0.6	Buy	DCF, PER10x FY19
06/03/19	phillip	Propnex	0.5	0.63	Buy	DCF
06/07/19	CIMB	Propnex	0.49	0.64	Add
08/16/19	UOB Kay Hian	Propnex	0.505	0.5	Hold
08/19/19	phillip	Propnex	0.5	0.59	Buy	DCF

Perennial Reit - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
02/14/19	DBS Vickers	Perennial Reit	0.645	0.83	Buy	RNAV (55% discount)
04/24/19	DBS Vickers	Perennial Reit	0.65	0.83	Buy	RNAV (55% discount)
05/13/19	DBS Vickers	Perennial Reit	0.64	0.83	Buy	RNAV (55% discount)

Stock calls for 9 September 2019

Date	Analyst	Company	Last	Target	Call	Valuation
09/09/19	CIMB	CSE Global	0.465	0.68	Add
09/09/19	Kim Eng	IHH Healthcare	1.85	2.1	Hold	Sum of parts, Ringgit $6.30 target price
09/09/19	DBS Vickers	Keppel Pacific	0.75	0.9	Buy
09/09/19	DBS Vickers	Mapletree Commercial	2.24	2.4	Buy	DCF
09/09/19	CIMB	Sembcorp Marine	1.19	1.26	Hold	PB1.2x CY19
09/09/19	Kim Eng	Venture	15.48	18.88	Buy	Roe-g/Coe-g, PB2.2x FY19

The HK protestors have revealed their true aim of their protests.

https://sg.news.yahoo.com/hong-kong-protesters-plan-march-022648940.html

The true aim of the protests is to break away from China and gain independence but HK has always been part of China.

Who are the organizers of these protests?

1. HK institute of human resource management
2. HK confederation of trade unions
3. HK journalists association
4. Civic party
5. Labour party
6. Democratic party

What do these organizers have in common?

They all received fundings from NED.

http://sg-stock.blogspot.com/2019/07/the-truth-behind-hk-protests.html

Why is making an interest rate policy a difficult task in China?

China has different provinces with different economic growth and each province has different tiered cities (tier 1, tier 2 & tier 3) which have different property prices.

2018 GDP numbers in China provinces:

China was growing at 6.6% in 2018 but its provinces were growing at different rates.  Tianjin was growing at 3.6% (below the country 6.6%) while Guizhou and Tibet were growing at 9.1% (above the country 6.6%).  Each province has its own tiered cities with different property prices.

When China cuts/raises its interest rates, the rates will have to be applied across the board and each province will be impacted differently.  For example, if China cut its interest rates, Tianjin's GDP growth (3.6%) might grow closer to the national rate (6.6%) which was good for Tianjian but Guizhou's GDP growth (9.1%) might be inflated to the extent that it became an overheating economy which was bad for Guizhou.  The interest rate changes would also impact the property prices in the different tiered cities in each province.

Therefore, the Chinese government has to assess the interest rates' impacts in each province first before making any change to the current interest rates.  The assessments will take time since every mayor has to report the impacts back to the central government for better decision making.

The SG government is glad that it is not facing such a difficult task.  Can you imagine SG has different GDP growth in each town?  What if Ang Mo Kio had a 9.1% growth while Chua Chu Kang had a 3.6% growth and each town had its own tiered cities?  Would the SG government be able to implement the property measures so easily?

When will China reduce its interest rates?

When the US and the rest of the world are in a rate-cutting frenzy, China cannot alienate itself and hold its rates perpetually.  Thus, it is a question of when will China do it instead.

In order for our readers to understand this better, it is best that the readers read and understand the rationale and logic of China not reducing its interest rates at this moment.

https://sg-stock.blogspot.com/2019/06/china-has-started-to-sell-us-treasuries.html

What had  China done insofar to stimulate its economy after the US cut the FED rates?

China had implemented the new LPR and reduced the RRR.

http://sg-stock.blogspot.com/2019/08/why-is-renminbi-rmb-depreciating-again.html

http://sg-stock.blogspot.com/2019/09/china-has-just-cut-banks-rrr-by-50bp.html

Please read our post on RRR to understand its impact.

http://sg-stock.blogspot.com/2019/05/how-china-rrr-cut-will-impact-its.html

China does not have runaway inflation, so China can afford to cut its interest rates.  However, China is not doing it now. Why?

If you think that China doesn't cut its interest rates because of its simmering inflation, then I must say that you are wrong because you do not understand China's economic structure well enough.

The properties constitute a large part of the people's assets and the property sector is the Achilles heel of China.  Therefore, any disruption to the property sector will disrupt the economy severely.

As we can see, China has been trying to avoid any disruption to the property sector by implementing LPR and reducing RRR instead of cutting its interest rates because these 2 policies have minimal impacts on the property sector.

China will only cut its interest rates after it has figured out how to rein in the property prices with new property policies and measures because cutting the interest rates will create a buying frenzy to inflate the property prices.  A skyrocketing property market will create social unrest and China is trying to maintain stability in the country.

Baltic dry index - 2462

Today, Friday, September 06 2019, the Baltic Dry Index decreased by 37 points, reaching 2462 points.

Baltic Dry Index is compiled by the London-based Baltic Exchange and covers prices for transported cargo such as coal, grain and iron ore. The index is based on a daily survey of agents all over the world. Baltic Dry hit a temporary peak on May 20, 2008, when the index hit 11,793. The lowest level ever reached was on Wednesday the 10th of February 2016, when the index dropped to 290 points.

================

Related stock: Sembcorp Marine, Cosco & Pan ocean.

US rig count - 898

Related stock: Keppel Corp, Sembcorp Marine & Cosco.

The Hong Kong protest continues after HK CE's telecast.

https://sg.news.yahoo.com/hong-kong-protesters-aim-stress-test-airport-210048026.html

We had already stated that the HK protest would not end because the protestors were paid to protest.  Those protestors are not interested in the extradition bill because it is never the goal of their protests.  Their goal is to make quick money out of these protests.

https://sg-stock.blogspot.com/2019/09/latest-hk-chief-executives-telecast.html

https://sg-stock.blogspot.com/2019/09/the-hk-protestors-have-rejected-hk-ces.html

We hate to be right in our analysis for this kind of situation.

China has just cut the bank's RRR by 50bp!

https://www.scmp.com/economy/china-economy/article/3026064/china-cuts-banks-reserve-requirements-latest-effort-boost

China has just cut the bank's RRR by 50bp to stimulate its economy.

Many analysts had expected China to cut its interest rates to stimulate its economy and they were proven to be wrong when China didn't do as they concluded.  We had stated in June 2019 that China wouldn't cut its interest rates but would reduce its RRR further.

http://sg-stock.blogspot.com/2019/07/will-china-cut-its-bank-interest-rates.html

Please read our economic analysis in June to understand the rationale for China not to cut its interest rates.

https://sg-stock.blogspot.com/2019/06/china-has-started-to-sell-us-treasuries.html

Will the US Fed reduce its interest rates in September 2019?

http://sg-stock.blogspot.com/2019/08/the-us-fed-has-cut-interest-rate-by-025.html

We got it right when we predicted a US FED rate cut in July by analyzing the 4 important rates in US.

Let's do it again to see what will happen in September 2019.

Iorr: 2.10% (Falling), Max is 2.25% as set by the FED.

Effr: 2.13% (Falling)

Ioer: 2.10% (Falling)

On RRP: 2%

The official US interest rates set by the FED range from 2% to 2.25% currently.

Effr: 2.13% (Loan rate offered by FED to US bank)
Ioer: 2.10% (Deposit rate offered by FED to US bank for the excess fund)

The spread between Effr and Ioer denotes the monetary supply condition in the US banking system.  In other words, the lesser the spread, the looser the monetary supply and vice versa.  A shrinking spread describes an easing while a widening spread describes a tightening condition.  This spread has not widened which means that there is no monetary tightening in the US.  However, the 10-year treasury yield (risk-free rate) is only around 1.5% currently which is below the Ioer (2.1%).  Thus, the US FED has to cut its rates to make the Ioer less attractive to the banks in order to stimulate the economy.

Please read the post below to understand the 4 interest rates better.

http://sg-stock.blogspot.com/2019/04/whats-happening-to-usd-now-why-is-it.html

The falling rates are signaling that the US FED is likely to cut rates again for it to stay relevant.  Furthermore, the US FED is being held hostage by Trump and wall street to cut rates now.  Therefore, the US Fed has no choice now, especially the PMI is weakening.

http://sg-stock.blogspot.com/2019/09/ism-pmi-analysis-for-us-economy-in.html

If the US Fed dares to defy Trump and Wall Street, the stock markets will crash.  I don't see the US Fed having the guts or gumption to fight for its independence and risk crashing the stock markets by putting the rates on hold.