Does one hand know what the other is doing?

Are Chinese policymakers panicking? Probably not but Sunday's move by the PBOC to cut the banks' reserve ratio requirements by a full percentage point was surprising to almost everyone, and shocking to some. Regulators do not seem to be on the same page.  Just a day before the central bank's chairman, Zhou Xiaochuan, was quoted as saying China's leadership had room to ease but might not need to. And just Friday, the Shanghai and Shenzhen stock exchanges announced measures aimed at curbing the recent rise in stocks (see my earlier blog). We might have been expecting a big sell off this morning (Monday) in mainland and Hong Kong shares but with the RRR cut yesterday any downward pressure will now be mitigated. The RRR cut is the largest since December of 2008. The action on Friday caused futures to tumble 5 percent. What is going on?  For a more nuanced take of the RRR cut read this WSJ article:    http://www.wsj.com/articles/china-central-bank-cuts-banks-reserve-requirement-ratio-1429436676