February 20th, 1:35 pm by Barbara Zigah
(eToro Blog) With China’s slowing growth a clear concern to Beijing it was only a matter of time before the government made further changes to its monetary policy. On Saturday, the people’s Bank of China announced that it was again relaxing reserve requirements, this time to 20.5% for the largest commercial banks, again a reduction of 50 basis points. The last time the PBOC eased was in December 2011. That news gave a broad lift to the global financial markets.
European equity markets are all higher, with mining shares leading the rally. As of this writing the FTSE is up by 45.55 points, the FRA40 by 70 points and the DAX by 30.57 points. On OpenBook, German trader lena240507 closed out a long position in the DAX for a 25.72% profit. This trader, who allocates nearly 95% of the portfolio to the DAX for a 2.8% return, is on track to post a 148% profit for the week and 197% for the month. Two open long positions are already returning a profit for this trader who might be worth watching for anyone interested in giving the DAX a higher allocation in their portfolio.
Commodity-linked currencies including the Euro and the Aussie Dollar also continue to rally, and gold and other precious metals are also being driven higher. On the OpenBook, gold is selling at $1732.50 per ounce, and sentiment is being driven by bulls. Gold was also given a boost from news that hedge fund manager and billionaire investor John Paulson said in a client note that there has never been a better time to buy gold as an inflationary hedge given the likelihood of more easing by the world’s central banks. OpenBook gold guru javiviveloz, who now has 101 copiers to his credit, has three open short positions in gold all currently showing a small profit, but if the gold rally should heat up in earnest there are several open buys waiting in the wings for just such an event.
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