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although the us stock market performed generally overnight, the asia-pacific market was soaring this morning. the nikkei 225 index and the south korean kospi index both rose by more than 1.7% at one point, and the south korean kospi2000 rose by more than 2.3% at one point. from the news perspective, there is also a significant positive impact.

first, fed governor adriana kugler expressed strong support for the federal open market committee's (fomc) decision to cut interest rates by 50 basis points last week. if things continue to develop in the direction they have so far, then further rate cuts would be appropriate. at this time, the financial officer of bank of america said that the fed seems to be winning the battle against inflation in the united states.

second, bank of japan governor kazuo ueda said that the unwinding of short-term speculative yen positions, which was partly responsible for the market turmoil in august, may be coming to an end. in addition, a bank of japan member said that the bank of japan must avoid over-creating market expectations for future rate hikes because inflation expectations have not yet stabilized at 2%.

third, the liquidity of the us market may surge again. yesterday, the fed's overnight reverse repurchase was nearly 416.2 billion us dollars, which means that the fed has recovered more than 400 billion us dollars of liquidity by selling treasury bonds, which also indirectly proves that the liquidity level of the market is very high recently.

a sudden and important news

according to the latest news, federal reserve board member adrienne kugler said on wednesday that she "strongly" supports the decision to cut interest rates by 50 basis points, and she would support further rate cuts if inflation continues to make progress. kugler said in a speech at harvard kennedy school: "while the federal open market committee's future actions will depend on the inflation, employment and economic activity data we receive, if the situation continues to develop in the direction it has so far, then further rate cuts will be appropriate."

she said that the job market has cooled down and she does not want it to weaken further; it is reasonable to shift the focus to employment; it will still take some time to reduce the inflation rate to 2%; considering the lag of policies, it is necessary to cut interest rates in advance; the neutral interest rate is not the main factor in interest rate decisions.

kugler served as chief economist at the u.s. department of labor in 2011 and 2012, and as vice provost at georgetown university from 2013 to 2016. her main research and teaching interests include labor markets and policy evaluation. her work includes contributions to the role of labor regulations, unemployment, and immigration. perhaps she saw the pressure in the labor market, so she expressed such a view.

the market also has the latest expectations for the fed's interest rate. on september 26, according to cme's "fed watch", the probability of the fed cutting interest rates by 25 basis points in november is 40.8%, and the probability of cutting interest rates by 50 basis points is 59.2%. the probability of a cumulative rate cut of 50 basis points by december is 19.5%, the probability of a cumulative rate cut of 75 basis points is 49.6%, and the probability of a cumulative rate cut of 100 basis points is 30.9%.

it is worth noting that the liquidity in the us market may be quite abundant recently. on wednesday, the scale of overnight reverse repurchase agreements (rrp) used by the federal reserve was us$416.193 billion. at the same time, the secured overnight financing rate (sofr) remained at a relatively low level.

asia pacific market takes off

the asia-pacific market also took off in early trading today. the japanese stock market rose by more than 1.7% at the beginning of the session, and then the increase expanded to more than 2%. the south korean stock index also followed suit. this happened against the backdrop of the appreciation of the yen. the market seems to have stopped overreacting to the carry reversal trade.

bank of japan governor kazuo ueda said yesterday that the unwinding of short-term speculative yen positions, which was partly responsible for the market turmoil in august, may be coming to an end. speaking in osaka on tuesday, ueda also said the bank of japan needs to carefully assess the trends in domestic and foreign financial and capital markets and the overseas economic situation behind them when formulating policies. "we have enough time to do this." he conveyed a similar message last friday when the bank of japan's monetary policy committee voted unanimously to keep interest rates unchanged.

in addition, the minutes of the bank of japan's monetary policy meeting in july showed that a bank of japan member said that interest rates needed to be raised in a timely and gradual manner; a bank of japan member said that the neutral interest rate level was at least around 1%.

as for a-shares, there was a counterattack in the morning trading today, and individual stocks rose again. as the long holiday approaches, from yesterday's data, leveraged funds did not enter the market for trading, and the financing balance of the two markets decreased by 159 million yuan yesterday. however, the market's enthusiasm for long positions is still there.

huang wentao, chief economist of cicc, said that with the downward trend in risk-free interest rates, orderly inflow of long-term funds into the market, continued stabilization of capital market policies, and the introduction of concentrated and large-scale monetary policies, a-shares are currently rising from the bottom.

deng haiqing of avic fund believes that, historically, every major adjustment in the monetary policy transmission mechanism will usher in a super bull market. the launch of the central bank's interest rate marketization reform in 2014 also boosted the a-share bull market from 2014 to the first half of 2015. this time should be no exception. the new spring of the chinese stock market has arrived. it is time to move again after moving deposits to fixed income wealth management.