Investment Daily Note

Market Highlights

Chinese Premier Li Keqiang chaired a cabinet meeting yesterday, and it was proposed that tax breaks in form of accelerating depreciation would be expanded to four more industries, namely light industry, textiles, automotives and machinery. The tax breaks are estimated to reduce corporations' tax bills by RMB5bn this year, which may encourage fixed asset investment and accelerate industrial upgrading.

Consumer Price Index (CPI) in the U.S. dropped 0.1% MoM in August, the first drop since January. Eurozone saw its August consumer prices rise 0.1% YoY, the lowest in four months. With inflation pressure still subdue in both the U.S. and Europe, central banks see increasing challenges in boosting inflation.