International News (Issue 375) – 30 October 2015

It was a busy week in international finance.

The Chinese central bank cut interest rates and regulatory reserve requirements last weekend, in a move aimed at freeing up greater liquidity for the troubled economy.

The cut was largely expected and will surely be followed by more rate reductions in the months ahead.

What was fascinating in China this week was the official repeal of the 1-child policy (not that every couple was forced to adhere to this policy, cough cough). Companies exposed to infant nutrition and the like, jumped in trading Thursday night at the prospect of a pick-up in demand for the trusted Western products – Bega & A2 Milk etc locally, and Danone (BN) and Mead Johnson (MJN) overseas.

The Federal Reserve meeting came and went and though rates weren’t moved, the commentary took a marginally more hawkish tone. The FOMC intimated that their previous worries about the impact of financial market weakness had now played out and that the potential for a move ‘at the next meeting’ would be considered.

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