China's stock market exhibited a mixed response to the People’s Bank of China's (PBOC) recent monetary easing measures on Wednesday, May 7, 2025. Bond yields showed varied reactions, with the one-year bond yield decreasing by 1.45 bps and the 10-year yield increasing by 2 bps [N/A]. These movements occurred as traders awaited developments from the U.S.-China trade talks held in Switzerland this week.
The blue-chip CSI 300 Index and the Shanghai Composite Index saw increases of 0.6% and 0.8% respectively, after retracting from earlier gains [N/A]. Hong Kong's Hang Seng Index remained relatively flat following an initial rally of over 2% [N/A]. These market fluctuations reflect investor uncertainty, despite the central bank's efforts to stimulate economic growth [N/A].
The PBOC announced a comprehensive 10-point monetary policy package aimed at boosting market confidence and supporting innovation-driven growth. These measures include lowering the reserve requirement ratio (RRR) for financial institutions by 0.5 percentage points and cutting benchmark interest rates by 0.1 percentage points. U.S. Treasury Secretary Scott Bessent and chief trade negotiator Jamieson Greer are expected to meet with China's He Lifeng in Switzerland to discuss trade matters.
The yuan weakened against the dollar following the easing measures, reversing gains from the previous day [N/A]. Analysts suggest the PBOC is strategically managing RMB depreciation pressure, with stability remaining a key policy objective for Beijing [N/A].