Market Information Tuesday 22 October 2024

Chinese banks have lowered their benchmark lending rates, after the central bank’s easing measures late September, to boost economic growth and address the housing market slump. The one-year loan prime rate was cut to 3.10% from 3.35%, and the five-year loan prime rate to 3.60% from 3.85%. These cuts exceed the forecasted range of 20-25 basis points by the People’s Bank of China and the 20 basis point reduction expected by Bloomberg economists.

The dollar rose on Monday, supported by higher U.S. bond yields and strong economic data indicating the Federal Reserve can delay rate cuts. Markets see a 91.7% chance of a 25 basis point cut in November. The 10-year U.S. Treasury yield increased 8.3 basis points to 4.158%, reaching a 3-month high.

Recent volatility in risk-sensitive assets raises concerns that the Federal Reserve’s interest rate cuts may be premature or unsustainable. Emerging Markets (EM) sovereign dollar bonds and local-currency bonds both saw yields increase by 9 basis points since Sept. 18, according to Bloomberg. EM equity, mainly driven by China, rose 13% this year but still lags the S&P 500’s 23%, disappointing investors.

The 6M Euribor decreased with 1 basis point to 3.03% compared to previous business day. The 10Y Swap increased with 8 basis points to 2.44% compared to previous business day.

In the attachment, today’s market data on money and capital market rates as well as other rates are presented.