G3 central bank talks this week:

• The Federal Open Market Committee (FOMC) on Wednesday, the European Central Bank on Thursday and the Bank of Japan on Friday

put a damper on major FX volatility during the session.

However, an announcement by China’s Politburo promising more support for the Chinese economy provided a regional focus. See the bullet points above for more on the Politburo announcements (note that the details are still pretty much non-existent). In addition, measures should include:

• addressing local debt risks through a comprehensive debt resolution plan
• placing job stability on a higher, strategic level
• real estate policy should be quickly adjusted and replaced with the previous “not for speculation” rhetoric.

Shares of Chinese developers rose sharply in Hong Kong and on mainland exchanges. China’s stock markets also rallied more broadly.

The yuan traded higher, helped by another strong central rate fix from the People’s Bank of China (500+ points below estimate for USD/CNY). The yuan also found bids from major Chinese state-owned banks actively intervening to support the yuan by selling USD/CNY and USD/CNH.

China-proxies FX such as the AUD and NZD have also gained, although not nearly to the same extent as the yuan.

Asian Stock Markets:

• Japan’s Nikkei 225 -0.3%

• China’s Shanghai Composite +1.6%

• Hong Kong Hang Seng +3.2%

• South Korean KOSPI +0.1%

• Australian S&P/ASX 200 +0.4%