LIQUIDITY NEWS ...
[Latest Endogenous Liquidity Index: -65.8%; Latest Global Dollar Liquidity measure: +28.7%]

- The Fed cuts rates. The FOMC lowers the fed funds target to 1.00% from 1.50%; in a related action, the Board of Governors unanimously approves a 50-basis-point decrease in the discount rate to 1.25%. [Communiqué]

- Two new swap lines. The Fed announces the establishment of temporary reciprocal currency arrangements (a.k.a swap lines) with the Banco Central do Brasil, the Banco de Mexico, the Bank of Korea, and the Monetary Authority of Singapore. (A similar announcement was made yesterday with respect to the Reserve Bank of New Zealand.)

- Norway's central bank lowers key rate from 5.25% to 4.75%. From the communiqué: "There is now unusually high uncertainty surrounding economic developments ahead. An overall assessment of the outlook and the balance of risks suggests that it is now appropriate to reduce the key policy rate by 0.50 percentage point. Weight is given to moving forward the reduction in the key policy rate so that lending rates for households and businesses can gradually be reduced".

- The People's Bank of China cuts one-year lending rate from 6.93% to 6.66%. From Bloomberg: "This cut was driven by the slowdown in the third quarter and the likelihood that the U.S. and other central banks will cut rates,'' said Xing Ziqiang, an economist at China International Capital Corp. in Beijing". Coordinated rate cuts, anyone?