| Asset | Level | Change |
|---|---|---|
| Shanghai Composite | 3,957.05 | -1.24% |
| CSI 300 | 4,567.02 | -0.35% |
| Hang Seng | 25,277.32 | -0.88% |
| TAIEX | 33,543.88 | -0.43% |
| USD/CNY | 6.89 | +0.18% |
| USD/HKD | 7.83 | -0.06% |
| Copper | 5.37 | -1.08% |
| Brent Crude | 106.41 | -2.06% |
| Gold | 4,574.90 | -0.56% |
| Bitcoin | 70,276.18 | -0.35% |
| China 2Y Govt Yield | - | - |
| China 10Y Govt Yield | - | - |
| Data | Prior | Cons | Actual |
|---|---|---|---|
| Loan Prime Rate 1Y | 3 | 3 | 3 |
| Loan Prime Rate 5Y | 3.50 | 3.50 | 3.50 |
| FDI (YTD) Year-over-Year | -5.70 | - | -5.70 |
| Data | Prior | Cons | Time |
|---|---|---|---|
| No events available | |||
Mainland China's Loan Prime Rate for 1Y stayed unchanged at 3%, matching consensus and previous levels, while the 5Y rate held at 3.5%, indicating the People's Bank of China (PBoC) is maintaining a steady policy stance amid emerging inflationary signals from rising oil prices. Foreign Direct Investment (YTD) YoY in mainland China remained at -5.7%, unchanged from the prior reading, highlighting ongoing challenges in attracting overseas capital due to economic slowdown and geopolitical tensions. Equities across Greater China weakened, with the Shanghai Composite closing at 3,957.05 after a 1.24% drop, driven by declines in resource-linked stocks as copper prices fell 1.08% to 5.37.The CSI 300 index slipped 0.35% to 4,567.02, reflecting mixed sector performance with tech holding up better than materials. In Hong Kong, the Hang Seng index fell 0.88% to 25,277.32, weighed down by property and financial shares amid concerns over global rate paths. Taiwan's TAIEX declined 0.43% to 33,543.88, pressured by semiconductor exporters facing softer global demand.Currency moves were modest, with USD/CNY rising 0.18% to 6.89, while USD/HKD edged down 0.06% to 7.83, staying within the peg range. Commodities softened, with Brent crude down 2.06% to 106.41, gold off 0.56% to 4,574.90, and Bitcoin dipping 0.35% to 70,276.18.
With no major data releases scheduled for today in Greater China, markets will likely focus on global cues, including any updates on the Iran conflict's impact on oil prices, which could influence mainland China's inflation trajectory. Attention may shift to potential State Council signals from Beijing on stimulus measures, especially in the property sector, to counter persistent deflation risks. In Hong Kong, traders will monitor aggregate balance levels for hints of HKMA interventions amid USD/HKD peg stability.Taiwan's markets could react to semiconductor export outlooks, with any news on US-China trade frictions amplifying volatility. Broader Asia-Pacific sentiment may be shaped by upcoming US business surveys, potentially affecting cross-strait investment flows. Overall, a quiet calendar suggests consolidation in equities unless external shocks from commodities or geopolitics intervene.
Mainland China's economy is showing signs of exiting deflation faster than expected, driven by surging global oil prices from the Iran war, which could lift the CPI YoY from its recent -0.10% level and reduce pressure on the PBoC for aggressive easing. However, weakening EV demand, as seen in Xpeng's shortfall revenue forecast, underscores slowdowns in consumer sectors amid broader stagnation affecting the reform generation's job market. Cross-strait trade remains resilient, with Taiwan's semiconductor links providing a buffer, though Hong Kong's role as a financial hub faces headwinds from global rate uncertainty.China-Nigeria trade exceeded $28 billion in 2025, up 28% YoY, highlighting deepening economic ties that could support mainland export diversification amid global shifts.
The ongoing war with Iran is roiling global economies, pushing oil prices higher and threatening to reverse deflationary trends in Greater China, where Brent crude's 2.06% drop to 106.41 yesterday still leaves it elevated enough to import inflation into mainland China's supply chains. The US Federal Reserve held rates steady amid the conflict, with economic growth at just 0.7% last quarter, signaling caution that could strengthen the USD and pressure the yuan, impacting USD/CNY dynamics and Hong Kong's peg. European nations, including the UK and France, are grappling with fiscal strains from the energy crisis, raising inflation forecasts that might lead to rate hikes and reduce demand for Greater China's exports.In Asia, South Korea's won is wobbling under Middle East shockwaves, contrasting with Taiwan's relative stability tied to semiconductors, while Japan's resilience highlights divergent monetary paths affecting regional trade. Brazil's finance minister resigned to run for governor, delaying tax plans ahead of elections and potentially shifting commodity flows away from China-dependent markets. Saudi Arabia's mining boom, with $2.5 trillion in resource potential, could diversify global supply chains, challenging mainland China's dominance in critical minerals like copper.Overall, these developments heighten risks for Greater China's recovery, particularly in energy-intensive sectors, as global surveys point to uneven growth amid geopolitical turmoil.
The People's Bank of China (PBoC) kept the 1Y Loan Prime Rate at 3% and the 5Y at 3.5%, aligning with expectations and reflecting a wait-and-see approach as oil-driven inflation begins to counter deflation, with no immediate signals of RRR cuts or liquidity boosts from the State Council. PBoC's steady midpoint guidance supported USD/CNY at 6.89, up slightly, amid stable FX reserves and efforts to manage capital outflows. The Hong Kong Monetary Authority (HKMA) maintained the USD/HKD peg near 7.83, with aggregate balance likely sufficient to absorb any liquidity pressures from global rate divergences, though rising US yields could test interventions.(cont...)
Taiwan's Central Bank of the Republic of China (CBC) showed no new policy moves, focusing on FX stability to shield semiconductor exports, which remain key amid softer global chip demand. Across Greater China, central banks are navigating the Iran conflict's fallout, with PBoC potentially eyeing targeted support for property if FDI weakness persists at -5.7%. HKMA's peg mechanics remain robust, while CBC's outlook ties closely to tech trade flows, with no rate decisions imminent.