Did the central bank’s simultaneous RRR cut and interest rate cut take effect, sparking a surge in A-share trading volume—so much so that the Shanghai Stock Exchange’s trading system crashed?

The central bank’s simultaneous RRR cut and interest rate cut took effect, triggering a surge in A-share trading activity—the ChiNext Index soared by 9.33%! 1. Last night, U.S.-listed Chinese stocks went wild! U.S. equities continued rising last night—but paled in comparison to the explosive rally in U.S.-listed Chinese stocks! The three major U.S. indices rose by just 0.62%, 0.6%, and 0.4%, respectively; meanwhile, the U.S.-listed China stock index surged 10.84%, and the Nasdaq Golden Dragon China Index jumped 10.85%. It seems nothing on Earth can halt the furious ascent of Chinese assets—after prolonged suppression, the rebound has been all the more forceful! 2. The RMB exchange rate broke through 7! We had expected the recent sharp appreciation of the RMB to pause at the psychologically critical and technically significant 7.0 threshold for some time—but it lingered there for only one day before breaking through overnight. Last night, the offshore USD/CNY exchange rate plunged by -0.85%, with the RMB appreciating violently by 630 basis points in a single night! 3. The central bank’s RRR cut and interest rate cut have taken effect! This morning, the People’s Bank of China announced an immediate 50-basis-point RRR cut, releasing over one trillion yuan in liquidity. Following the cut, the current reserve requirement ratio stands at approximately 6.6%, leaving further room for adjustment—another 25–50 basis points may be cut by year-end, depending on conditions. Additionally, the PBOC unveiled its largest interest rate cut in four years: starting September 27, the reverse repo rate for government bonds will be lowered by 20 basis points. Going forward, the PBOC will also guide both deposit and lending rates downward in tandem. 4. Did the Shanghai Stock Exchange crash due to order overload? Owing to the exceptionally heated trading activity across both exchanges—and the massive influx of capital—it remains unclear whether the disruption was caused by overwhelming order volume or a potential cyberattack. In any case, from 10:07 a.m. onward, the SSE’s intraday chart turned into a flat line, showing virtually no trading volume, and retail investors’ orders were stuck in limbo.

The central bank rolled out major stimulus measures—will the market respond with a strong bullish candle?

On the news front: Maotai 1935’s official pricing announcement triggered a near-40% surge; Do-Fluoride Co., Ltd. expects its 2021 net profit to rise 2,430%–2,635% year-on-year; iHealth Labs forecasts a 271%–395% YoY increase in 2021 net profit, driven by sharply higher sales performance in the U.S. market; Zhinyun Technology plans to prioritize development of automated equipment for flat-panel display module assembly; PowerLink New Energy signed a 100-million-yuan supply agreement for lithium battery components; SF Holding reported an 8.77% YoY increase in express logistics revenue for December 2021; EasyBio expects its 2021 net profit to rise 236%–297% YoY; King Long Automotive received a total of 626 million yuan in national new-energy vehicle promotion subsidies for its subsidiaries; China Fortune Land Development has signed debt restructuring agreements covering 8.857 billion yuan in debt; Jieye Chemical expects its 2021 net profit to rise 115%–147% YoY; Pien Tze Huang reported a 45.55% YoY increase in 2021 net profit; Huayou Cobalt’s subsidiary plans to inject 867 million yuan into Huayou Pohang and 655 million yuan into Pu Hua Company; Jiayuan Technology forecasts a 184%–224% YoY increase in 2021 net profit; Yankuang Salt Lake Potash expects its 2021 net profit to rise 90%–110% YoY; Wanli Battery intends to acquire a 48.95% stake in TeRui Battery; Yongqing Environmental Protection forecasts a 103%–133% YoY increase in 2021 net profit; XieXin Energy Science & Technology entered into a cooperation agreement with Shenxiang Technology on heavy-duty truck battery-swap technology R&D; Founder Securities forecasts a 50%–70% YoY increase in 2021 net profit; Aluminum Corporation of China International reported Q4 newly signed contract value of 18.307 billion yuan, up 15% YoY; Dongfeng Technology forecasts a 133% YoY increase in 2021 net profit; Hengshuai Co., Ltd. forecasts a 66%–81% YoY increase in 2021 net profit; Yongdong Co., Ltd. forecasts an 87%–112% YoY increase in 2021 net profit. Meanwhile, the three major U.S. indices accelerated their decline toward session end: the Nasdaq fell 1.15%, hitting its lowest level since mid-October last year—and down 10.7% from its record closing high on November 19, 2021, entering correction territory; the Dow Jones Industrial Average fell 0.96%, and the S&P 500 dropped 0.97%, both marking their lowest levels in a month.

Morning Bid: Central Banks Take the Stage

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