### Summary
China is expected to cut lending benchmarks, including the mortgage reference rate, to revive credit demand and support the struggling property sector.
### Facts
- 🏦 China is predicted to lower lending benchmarks at the monthly fixing, including the loan prime rate (LPR).
- 📉 All participants in a survey of 35 market watchers anticipate cuts to both the one-year LPR and the five-year LPR.
- 📊 The majority of participants expect a 15-basis-point cut to the one-year LPR, while the remaining forecast a 10 bp reduction.
- 📈 Meanwhile, 94% of respondents predict a reduction of at least 15 bp to the five-year LPR, which serves as the mortgage reference rate.
- 💰 Market expectations for further monetary easing are driven by declining credit lending and increasing deflationary pressure.
- 🏠 The central bank has promised to adjust and optimize property policies to address the deepening crisis in the property market.
- 📱 Analysts believe that the central bank may also implement reserve requirement ratio (RRR) cuts and balance sheet expansion to manage risks in key sectors.
Source: [Reuters](https://www.reuters.com/business/chinas-loan-benchmarks-face-big-cut-next-month-fixing-poll-2022-10-28/)
China's central bank has cut the main benchmark interest rate in an attempt to address falling apartment prices, weak consumer spending, and broad debt troubles, but the reduction was smaller than expected, signaling the potential ineffectiveness of traditional tools to stimulate the economy.
China's one-year loan prime rate is slashed by 10 basis points, while the five-year rate remains unchanged, leading to mixed performance in Asia-Pacific markets, with Hong Kong's Hang Seng index slipping 1.8%, mainland Chinese markets in negative territory, and other markets on the rise; meanwhile, Thailand's economy expands by 1.8% in Q2, lower than expected.
Philadelphia Federal Reserve Bank President Patrick Harker suggests that the central bank may maintain steady interest rates in September and for an extended period of time to allow previous rate hikes to continue lowering inflation.
Chinese state-owned banks are expected to lower interest rates on existing mortgages, with the quantum of the cut varying for different clients and cities, in an effort to revive the property sector and boost the country's economy.
The Bank of Canada has decided to keep its benchmark interest rate at 5% amid signs of a slowing economy, but has not ruled out further rate hikes if inflationary pressures persist.
China's new yuan loans are expected to rebound in August after a decline in July, as the central bank implements measures to support economic growth during soft domestic and international demand.
China's central bank is expected to maintain steady borrowing costs while increasing liquidity in order to support economic stabilization, as analysts predict that the one-year medium-term lending facility (MLF) interest rate will remain unchanged.
The US Federal Reserve is expected to hold interest rates steady in September while leaving the door open for possible rate hikes in the future, as it tackles inflation and assesses the health of the economy.
The Federal Reserve is expected to hold its benchmark lending rate steady while waiting for more data on the impact of previous rate hikes on the US economy, but there is still a possibility of another rate increase in the future.
China is expected to maintain its benchmark lending rates as oil prices rise and market sentiment is affected; meanwhile, the Federal Reserve's policy meeting, Japan's trade data, and the United Nations General Assembly will also influence Asian markets.
The Federal Reserve has decided to keep interest rates steady, giving borrowers a break after 11 rate hikes and aiming to tame inflation while avoiding a recession.
The Swiss National Bank keeps interest rates unchanged at 1.75% and hints that further tightening may be necessary to ensure price stability, while also warning of a possible global economic slowdown and addressing the risk of energy shortage in Europe.
Central banks, including the US Federal Reserve, European Central Bank, and Bank of England, have pledged to maintain higher interest rates for an extended period to combat inflation and achieve global economic stability, despite concerns about the strength of the Chinese economy and geopolitical tensions.
Major Chinese banks have reduced rates for outstanding home loans in an attempt to stimulate demand in the country's troubled property sector, but analysts doubt that the cuts will be sufficient to boost demand due to low consumer confidence and income expectations.