Stocks mixed as interest rate rise fears rise, China lowers LPR

Stocks mixed as interest rate rise fears rise, China lowers LPR
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The Reserve Bank of New Zealand wants rates to be ‘comfortably above neutral’, Reuters reported.

New Zealand’s central bank vice-president Christian Hawkesby said policymakers in New Zealand wanted interest rates to be “comfortable above neutral” to combat rising prices. According to Reuters.

this RBNZ raises cash rate by 50 basis points to 3% last week. Hawkesby told Reuters the central bank is considering increases of 25 or 75 basis points.

He said raising the official cash rate above neutral would lower inflation and “give us some breathing space to see how things are going.”

“Once we get [official cash rate] Up to the 4-4.25% level, we see things balanced equally from there. Therefore, we would put the same weight when removing the OCR,” he added.

Hawkesby said policymakers are waiting for the economy to cool off and agree that uncertainties are ahead.

– Abigail Ng

IMF will go to Colombo for more economical solutions

The International Monetary Fund will visit Colombo this week to continue discussions with Sri Lankan authorities on economic and financial reforms and policies.

“The aim is to make progress towards reaching a staff-level agreement on a possible IMF Enlarged Fund Facility (EFF) arrangement in the near term,” the IMF said over the weekend. said.

“As Sri Lanka’s public debt is considered unsustainable, approval of the EFF program by the IMF Executive Board will require adequate assurance from Sri Lanka’s creditors that debt sustainability will be restored.”

The IMF had already completed its first round of talks with Colombo in late June, where it was working on a macroeconomic and structural policy package to “correct macroeconomic imbalances, restore public debt sustainability and realize Sri Lanka’s growth potential”.

Other challenges to resolve include rising inflation levels and addressing severe balance of payments pressures.

The EEF is the IMF’s lending tool and helps countries deal with balance of payments or cash flow problems.

— Su-Lin Tan

China central bank cuts benchmark loan rates

The People’s Bank of China cut the one-year benchmark lending rate by 5 basis points and the five-year interest rate by 15 basis points, according to an online statement.

This brings the one-year loan prime rate to 3.65% and the five-year LPR to 4.3%.

Analysts polled by Reuters expected a 10 basis point cut in the one-year LPR, and half of those polled expected a 15 basis point cut from the five-year rate.

– Abigail Ng

CNBC Pro: How can you reduce the risk in your portfolio right now, according to professionals?

Stocks followed a volatile course this year as recession fears, inflationary pressure and other macro risks affected the markets negatively.

According to Goldman Sachs, Wells Fargo, and others, there are three ways investors can adjust their portfolios to reduce risk or reduce losses.

For subscribers read more here.

— Weizhen Tan

CNBC Pro: JPMorgan forecasts when rally in growth stocks will end

Investors have flocked to growth stocks lately, but as recession fears mount, market watchers are deciding whether to turn to safer bets instead.

But JPMorgan thinks the rally should continue and has identified a few indicators to watch for when considering rotations of growth stocks.

For subscribers read the story here.

— Zavier Ong

What to expect from Powell’s Jackson Hole speech?

Fed Chairman Jerome Powell is expected to speak at the central bank’s annual symposium this week in Jackson Hole, Wyoming, to shed light on the pace of future rate hikes.

Powell can make hawkish comments from Fed officials who have recently underlined their commitment to fighting inflation, although investors are enjoying a summer rally, partly with expectations of a less aggressive Fed.

Still, St. Louis Fed President James Bullard said in an interview last week: Wall Street Journal He said he was considering a further 0.75 percentage point increase in interest rates at the September meeting.

Check out CNBC Pro for More on what to expect from the Fed chair.

—Sarah Min

China poised to cut benchmark loan rates, according to Reuters poll

China will announce loan interest rates (LPR) on Monday and Analysts expect widespread cuts, according to a Reuters poll.

The majority of analysts had expected the one-year benchmark lending rate to be lowered by 10 basis points, while they had expected the five-year LPR to be lowered by more than 10 basis points.

Nearly half of the 30 respondents to the survey forecast a 15 basis point cut, Reuters reported.

The one-year LPR is now at 3.7% and the five-year rate at 4.45% after a January cut. China lowered its five-year LPR by 15 basis points in May in a move said to support housing demand.

– Abigail Ng

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