China: The much-anticipated stimulus spectacle turned out to be just another dud

Stephen Innes SPI Asset Management

After Chinese authorities unveiled a massive 10 trillion yuan ($1.4 trillion) lifeline aimed at easing local government debt, markets were anything but impressed. Chinese stocks and the yuan took a nosedive as investors, primed for the fireworks of a big stimulus splash, saw little more than a sputtering sparkler. The lifeline felt more like a quick fix than the full-blown stimulus bazooka the markets had hoped for—a response met with collective eye-rolls.

The misfire rippled through global markets, with oil prices slipping on fears that China’s economic slowdown could keep a tight lid on commodity demand.

Meanwhile, the looming Trump tariffs are stirring up another layer of uncertainty. Will he soften his stance or bring back his hardline “America First” agenda? That remains to be seen, but one thing’s certain—China won’t be throwing around cash unless there’s a clear endgame in sight. At this point, the economic light at the end of the tunnel is starting to look suspiciously like an oncoming train rather than an exit.

Author

Stephen Innes

SPI Asset Management

With more than 25 years of experience, Stephen has a deep-seated knowledge of G10 and Asian currency markets as well as precious metal and oil markets.

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