In less than a week, both China and the United States have made major moves, causing Chinese assets to explode and gold prices to soar!

In just one week, major events have been unfolding in the global macro markets!

First, the Federal Reserve made a bold move by cutting interest rates by 50 basis points, igniting market risk sentiment. This was followed by China releasing a long-awaited policy package, boosting international market confidence and sparking optimistic sentiment towards Chinese assets.

On Tuesday, the three major financial regulatory agencies in China gathered before the holiday to announce a series of policies, including a 50 basis point reserve requirement ratio cut, a 20 basis point cut in policy interest rates, reduction of existing home loan rates, establishment of tools for securities fund insurance company swaps, and creation of special refinancing for stock repurchases and holdings.

That evening, the China Securities Regulatory Commission took further action, issuing policies related to mergers and acquisitions, as well as market value management. The merger and acquisition policy encourages listed companies to strengthen industrial integration, significantly simplifies the merger review process, while the market value management guidelines require listed companies to enhance the quality of listed companies, improve operational efficiency and profitability, and promote the increase in investment value of listed companies.

With both China and the U.S. making significant moves, from A+H shares to the Renminbi, and to Chinese concept stocks, ETFs, options, and other Chinese assets listed overseas, investors rushed to buy. Emerging markets also received a boost, while expectations of another substantial rate cut by the Federal Reserve fueled a surge in gold prices to new historic highs.

Chinese Assets Soar, Gold Prices Surge!

On Tuesday, following the announcement of China's stimulus policies, the three major A-share indexes surged significantly. The Shanghai Composite Index rose by 4.15%, marking the largest single-day increase in over four years, while the Hang Seng Index broke through the 19,000 mark, closing up by 4.13%, the largest single-day increase in a year and a half.

Chinese concept stocks, which had already surged ahead, saw another significant increase overnight. The Chinese concept index shone throughout the day, closing up by over 9%, marking the largest increase since 2022 and the highest in four months. Pinduoduo, XPeng, Nio, Li Auto rose by over 11%, Bilibili by 17%, JD.com by nearly 14%, and Alibaba by nearly 8%.

The iShares China Large-Cap ETF (FXI) and the KraneShares CSI China Internet ETF (KWEB) also surged by around 10%, with KWEB trading well above all major moving averages.

The Renminbi continued to strengthen. On Wednesday, according to Bloomberg market data, the offshore Renminbi against the US dollar broke through the 7.0 mark for the first time since May last year.

In the options market, the trading volume of FXI's call options surged to the highest level since February. The premium for a 1-month contract betting on a 10% increase compared to a contract betting on a 10% decrease soared to the highest level since 2015, having been deeply discounted in early August.According to Bloomberg, in the largest trade of the day, an investor spent $6.75 million to buy FXI options, with the right to buy 15 million shares at $33 before mid-November, betting on at least a further 12% increase.

Optimism has also spread to the entire emerging markets. Emerging market stocks rose to their highest level in two and a half years on Tuesday, with the MSCI Emerging Markets Stock Index rising by 1.9% for the fourth consecutive day. The MSCI Emerging Markets Currency Index rose by 0.2%, with the biggest gains seen in the currencies of Brazil and Chile. The market expects that the growth of the Chinese economy will support the prices of bulk commodities exported from Latin America.

The iShares MSCI Emerging Markets ETF (EEM) closed at its highest level since April 2022, breaking through a significant resistance level.

While disappointing overnight economic data from the United States boosted market expectations of a significant rate cut by the Federal Reserve, gold surged to a new record high.

A report released by the Conference Board on Tuesday showed that US consumer confidence unexpectedly dropped by 6.9 points to 98.7 in September, marking the largest decline since August 2021, due to concerns about the labor market and overall economic outlook.

Christian Lawrence, cross-asset strategist at Cooperatieve Rabobank, stated that "these data have raised expectations of a 50 basis point rate cut by the Federal Reserve this year, which will support demand for higher-yielding assets."

Overnight, COMEX December gold futures rose by 1.11% to $2,682 per ounce at the close, reaching as high as $2,689.40 during the session, setting a new intraday high. Spot gold rose by nearly 1.4% to surpass $2,660 at the close, continuing to set new record highs, with a cumulative increase of 29% so far this year