Chinese PMI shows tentative signs of cyclical bottom

The People's Bank of China cut the required mortgage deposit from 30% to 25% for first-time buyers. This should add more fuel to the housing recovery. This adds to stimulus from interest rate cuts, reductions of reserve requirement ratio, injection of money into policy banks, setting up a fund aimed at small and micro businesses and lowering capital requirements for fixed-asset investment projects. 

"We look for 6.5% growth (q/q annualised) in Q4 up from the expected 6.0% (q/q annualised)", says Danske Bank.

From a market point of view, a lot of weakness in China has already been priced in. A long range of stimulus measures and a recovery in housing should lead to a moderate recovery in Q4 (which started today), added Danske Bank. This should support market sentiment.