China policy steps/Oil quietly at 1 yr high/PMI's/Rents/Earnings comments

We'll start with China as they take more steps to both incentivize more home purchases and tries to boost the value of the yuan. Officials are lowering down payment requirements in many cities, including Beijing and Shanghai that currently have strict rules. Also, beginning on September 25th, first time buyers who have a mortgage can request for a lower interest rate from their banks on it and in turn banks are lowering their own deposit rates so as to maintain their own profit margins. 

With regards to the yuan boost, the PBOC is lowering from 6% to 4% the FX reserve requirement starting on September 15th, thus allowing banks to hold more yuan. The offshore yuan is higher by .2% vs the US dollar and up for the 4th day in 5. 

As the Hong Kong markets were closed due to a typhoon, we only saw trading on the Mainland and the Shanghai comp closed up by .4% while the Shanghai Property index was up by 1.2%. We're also seeing a move higher in metals prices. Copper is higher by 1.3% and quietly to the highest level in 3 1/2 weeks. Aluminum, zinc, nickel and lead are all up between 1-2% too. WTI is also breaking out to the highest level in one year. We'll see another US rig count report today as I've continuously highlighted the persistent drop and the bull case for oil prices. I still expect them to go much higher and we're long energy stocks, both oil and gas. 

Also helping metals prices and the mood with China this morning was the August private sector focused Caixin manufacturing index which got back above 50 at 51 from 49.2 in July. The estimate was 49. Caixin said "Supporting the improvement in overall business conditions was a renewed increase in new order intakes. Companies indicated that firmer underlying market conditions had helped to boost client spending. The modest upturn in overall sales occurred despite a further drop in new business from abroad in August, suggesting that stronger domestic demand was the main source of growth." For all those worried about lower prices, "average input prices" rose for the first time in 6 months. China is a big place and while it has many challenges, it is not 'collapsing.'