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Rabobank analysts note that China offered the markets a new year’s gift lowering the required reserve ratio for commercial banks by 50bps to 12.5%. 

Key Quotes

“The PBoC estimates that the cut will inject around USD 115bn of liquidity into the financial system. The move reflects a strong commitment of the central bank to support the economy. The Caixin manufacturing PMI edged lower to 51.5 in December from 51.8. We anticipate the Chinese economy to slow down further to 5.7% this year.”